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Fitch Rates TMB's Basel III Tier 2 THB Notes at 'A(tha)'
May 2, 2017 / 6:30 AM / in 3 months

Fitch Rates TMB's Basel III Tier 2 THB Notes at 'A(tha)'

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(The following statement was released by the rating agency) BANGKOK, May 02 (Fitch) Fitch Ratings (Thailand) has today assigned a rating of 'A(tha)' to TMB Bank Public Company Limited's (TMB; A+(tha)/Stable) upcoming Thai baht-denominated Basel III-compliant Tier 2 subordinated unsecured debentures. At issue, the notes will have a tenor of 10.5 years. KEY RATING DRIVERS The Basel III Tier 2 notes are rated one notch below the anchor rating of 'A+(tha)' to reflect the notes' subordinated status and higher loss-severity risks relative to senior unsecured instruments. Key terms of the notes include a non-viability trigger (defined as emergency capital assistance from the central bank or any other empowered government agency), with partial rather than mandatory full write-down features. The Tier 2 notes are senior to any Additional Tier 1 securities with loss-absorption features. If written down, the Tier 2 notes rank pari passu with TMB's other Tier 2 loss-absorbing instruments that have write-down features. TMB's National Long-Term Rating of 'A+(tha)' is used as the anchor rating because the rating reflects the bank's standalone financial strength. Fitch believes that the bank's standalone credit profile best indicates its non-performance risk (that is, becoming non-viable). Fitch has not applied additional notching to the notes, as they have no going-concern loss-absorption features. TMB's standalone financial strength takes into account the bank's stable asset quality and profitability as well as its sound capital and liquidity positions. TMB is Thailand's seventh-largest commercial bank, with a market share of around 6% in loans and deposits. RATING SENSITIVITIES Any change in TMB's National Long-Term Rating would have a similar effect on the rating of the notes. TMB's Long-Term National Rating is sensitive to changes in the bank's standalone profile. Fitch may elect to downgrade the Long-Term National Rating if the bank's asset quality, profitability, liquidity or capitalisation were to deteriorate sharply. Conversely, the agency may upgrade its Long-Term National Rating if these factors show a sustained improvement. The other ratings of TMB are unaffected, and are as follows: Long-Term IDR: 'BBB-'; Outlook Stable Short-Term IDR: 'F3' Viability Rating affirmed: 'bbb-' Support Rating affirmed: '3' Support Rating Floor: 'BB+' National Long-Term Rating: 'A+(tha)'; Outlook Stable National Short-Term Rating: 'F1(tha)' USD3.0 billion senior unsecured medium-term note programme affirmed: 'BBB-' Long-term foreign-currency senior unsecured debt: 'BBB-' THB15.0 billion Basel III Tier 2 subordinated debt rating: 'A(tha)' Legacy Basel II subordinated debt rating: 'A(tha)' Contact: Primary Analyst Jackerin Jeeradit Associate Director +662 108 0163 Fitch Ratings (Thailand) Limited Park Ventures, Level 17 57 Wireless Road, Lumpini Patumwan, Bangkok 10330 Secondary Analyst Patchara Sarayudh Director +662 108 0152 Committee Chairperson Jonathan Lee Senior Director +886 2 8175 7601 Date of Relevant Rating Committee: 3 November 2016 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(tha)'for National ratings in Thailand. Specific letter grades are not therefore internationally comparable. Additional information is available on www.fitchratings.com Applicable Criteria Global Bank Rating Criteria (pub. 25 Nov 2016) here Global Bank Rating Criteria - Effective from 15 July 2016 to 25 November 2016 (pub. 15 Jul 2016) here National Scale Ratings Criteria (pub. 07 Mar 2017) here National Scale Ratings Criteria -- Effective Oct. 30, 2013 - March 7, 2017 (pub. 30 Oct 2013) here Additional Disclosures Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. 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