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TEXT-Fitch Rates Siam Commercial Bank's Sub Debentures 'AA-(tha)'
(The following was released by the rating agency)
BANGKOK/HONG KONG/SINGAPORE, August 31 (Fitch) Fitch Ratings (Thailand) Limited has assigned Siam Commercial Bank Public Company Limited's (SCB; 'AA(tha)'/Stable) unsecured subordinated debentures of up to THB20bn a National Long-Term rating of 'AA-(tha)'. The proceeds will be used for the bank's general corporate purposes.
The notes have a maturity of 12 years but are callable after seven years. The rating of these subordinated debentures is consistent with Fitch's approach of rating such performing instruments at one notch below the issuer's National Long-Term Rating.
SCB's ratings are underpinned by its sound capital and profitability, strengthened asset quality and reserves and its strong domestic franchise.
Fitch believes the bank's overall financial position is sufficiently robust to absorb considerable credit stress. This is reflected in the Stable Outlook. Established under the Royal Charter in 1904, SCB is Thailand's third-largest bank, with a 16% market share of loans and deposits at end-2011. The Crown Property Bureau is the bank's largest private shareholder with a 23.7% stake.
The Ministry of Finance holds another 23.1% in SCB through Vayupak fund, although it has limited board representation and no involvement in the management of the bank.
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