TRIS Rating Changes Rating Outlooks of “TBANK, SCIB and TCAP”to “Positive” from “Stable”

TRIS Rating Co., Ltd. has revised the rating outlooks of two banks and one company, Thanachart Bank PLC (TBANK), Siam City Bank PLC (SCIB) and Thanachart Capital PLC (TCAP), to “positive” from “stable”, following the official announcement on 11 March 2010 that TBANK will acquire 47.58% ownership of SCIB from the Financial Institutions Development Fund (FIDF). TBANK will tender to buy the remaining shares of SCIB in the stock market during April-July 2010.

TRIS Rating reported that the “positive” outlook of TBANK reflects the expectation that its market position in the banking industry on a consolidation basis will be strengthened, with more diversified loan structure and deposit base. The outlook also reflects a significant improvement of TBANK’s capital base, following the bank’s recapitalization plan. From total estimated acquisition cost of Bt68 billion for 100% ownership in SCIB, Bt35.8 billion will be funded by new capital injection from the bank’s parents, TCAP and Bank of Nova Scotia (BNS); Bt7.1 billion from hybrid tier-1 securities; Bt6 billion from Tier-2 subordinated debentures; and the remaining from TBANK’s cash on hand.

The outlook of SCIB reflects its stronger credit profile, enhanced by TBANK’s credit profile as the major shareholder after acquiring a 47.58% stake in SCIB from the FIDF. The outlook of TCAP follows the change in TBANK’s outlook as TCAP is an investment holding company of Thanachart Group with management control of TBANK through a 50.92% ownership stake, and the company has a stable stream of dividends from TBANK.

TRIS Rating said, TBANK’s consolidated assets as of December 2009 was Bt434 billion, while SCIB’s was Bt424 billion. After the consolidation, TBANK will be ranked fifth (from eighth) among 14 Thai universal banks. TBANK also benefits from business synergy with SCIB as both have different customer market segments. About 80% of TBANK’s loan portfolio was consumer loans and only 20% was corporate loans, while 67% of SCIB’s loan portfolio was corporate loans. After the consolidation, TBANK will have a better loan portfolio mix between consumer loans and corporate loan of 60% and 40%, respectively. On the liability side, SCIB’s diversified and stable deposit base, due to its long-term establishment, is expected to enhance TBANK’s funding base in the future.

The company rating of TBANK is affirmed at “A+”, while the subordinated debentures ratings are affirmed at “A” and the hybrid debt capital securities ratings are affirmed at “A-”. SCIB’s company rating is affirmed at “A”, while the rating of its subordinated debentures is affirmed at “A-”. TCAP’s company and senior debentures ratings are affirmed at “A”. TRIS Rating will make a full review for the company ratings of TBANK, SCIB and TCAP after the merger plan is finalized and agreed by the shareholders in April 2010, said TRIS Rating. -- End

Company Rating: Affirmed at A+ Issue Ratings: TBANK155A: Bt5,000 million subordinated debentures due 2015 Affirmed at A TBANK194A: Bt2,000 million subordinated debentures due 2019 Affirmed at A TBANK197A: Bt3,500 million hybrid debt capital securities due 2019 Affirmed at A- TBANK247A: Bt1,500 million hybrid debt capital securities due 2024 Affirmed at A- Rating Outlook: Positve from Stable Siam City Bank PLC (SCIB) Company Rating: Affirmed at A Issue Rating: SCIB196A: Bt10,000 million subordinated debentures due 2019 Affirmed at A- Rating Outlook: Positive from Stable Thanachart Capital PLC (TCAP) Company Rating: Affirmed at A Issue Ratings: TCAP103A: Bt4,000 million senior debentures due 2010 Affirmed at A TCAP105A: Bt2,500 million senior debentures due 2010 Affirmed at A TCAP11NA: Bt1,500 million senior debentures due 2011 Affirmed at A TCAP131A: Bt3,000 million senior debentures due 2013 Affirmed at A TCAP14NA: Bt9,000 million senior debentures due 2014 Affirmed at A Rating Outlook: Positive from Stable Copyright 2010, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.