Fitch affirms seven Thai banks

Fitch Ratings said it affirmed the ratings of seven major Thai banks and removed them from Rating Watch negative.

The ratings affirmed include the BBB+ long-term foreign-currency issuer default ratings, F2 short-term foreign-currency ratings, C individual ratings and 2 support ratings of Bangkok Bank, Krung Thai Bank, and Kasikornbank; the BBB+ long-term foreign-currency issuer default rating, F2 short-term foreign-currency rating and 2 support rating of Export Import Bank of Thailand; the A- long-term foreign-currency issuer default ratings, F2 short-term foreign-currency rating, C/D individual rating and 1 support rating of United Overseas Bank; and the A- long-term foreign- and local-currency issuer default ratings, F2 short-term foreign- and local-currency ratings, C individual rating and 1 support rating of Standard Chartered Bank.

Also affirmed were Bangkok Bank's BBB subordinated debt rating; Krung Thai Bank's BBB subordinated debt rating and BBB- tier-1 hybrid rating; Siam Commercial Bank's BBB+ senior unsecured debt rating and BBB subordinated debt rating; Kasikornbank's BBB subordinated debt rating; and the national ratings of each of the seven banks.

The outlook is stable.

This action follows the affirmation of the sovereign rating of the Kingdom of Thailand.

Thailand's major banks have so far weathered the short-term negative impact of the political crisis on economic growth, the agency said. If confidence is restored quickly by the newly appointed government, a rebound in consumer and investment spending could see higher growth and stronger performance for the major banks in 2007.

The change in government and the economic impact of major floods could temper economic growth and weaken fourth-quarter results for the banks, but Fitch said loan growth is expected to pick up in 2007 on the back of an economic rebound, which should help underpin the major banks' continued strong performance.

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