TRIS Rating Co., Ltd. has affirmed the company rating of TISCO Bank PLC (TISCO) and the ratings of its senior debentures at “A”. At the same time, TRIS Rating has assigned “A” ratings to TISCO’s two tranches of proposed senior debentures valued up to Bt3,000 million and Bt1,000 million. The rating outlook remains “stable”. The ratings reflect TISCO’s capable management team, good risk management system, good asset quality, strong market position in the hire purchase business, and better diversification of income sources. The ratings take into account TISCO’s higher financial liquidity and flexibility, and long-term opportunities in commercial banking businesses. However, the ratings are partially constrained by uncertain economic factors, uncertainty in the securities industry, intensifying competition in the corporate and retail finance industry and TISCO’s limited branch network compared with other well-established commercial banks.
The “stable” outlook reflects the likelihood that TISCO will deliver a medium-term financial performance as expected, and the settled commercial banking business platform will benefit the bank in terms of expanded scope of business and financial flexibility and liquidity. The bank’s good risk management system, its proven track record and its strong capital fund will help mitigate future downside risks from uncertain economic and business environment.
TRIS Rating reported that TISCO has had a limited branch network as a small universal bank. In terms of asset size, TISCO is ranked twelfth among all 14 Thai universal banks, with about 1% market share in 2006. At the same time, the bank had market share of 1.4% and 0.7%, respectively, in terms of loans size and deposits size. With more than 30 years of experience in the industry, TISCO has developed a proficient management team that has enabled the bank to compete in this very competitive industry. TISCO faced a small effect from applying new accounting standard (IAS39) in 2006 and is ready for BASEL II implementation in 2007 since the bank has good risk management system, efficient information management system, conservative accounting policy as well as strong capital fund and allowance for loan loss.
TRIS Rating said that TISCO’s management has a clear policy to focus on consumer finance businesses and to diversify into fee-based businesses. TISCO Group’s centralization of business operation and management system benefited the overall group’s business control and cost efficiency. During later phase of transition period to settle a universal banking system in 2006, TISCO faced a slight setback on its financial returns, but this will provide the bank with long-term opportunities in commercial banking businesses. The bank’s profitability in 2006 was limited by less favourable economic environment and rising competition in its core businesses including hire purchase and fund management.
TISCO had net profits of Bt1,546 million in 2006, a 14% drop from Bt1,791 million in 2005. Its return on average assets (ROA) declined from 2.5% in 2005 to 1.9% in 2006, while its return on average equity (ROE) also decreased from 14% to 12%. At the end of 2006, TISCO’s non-performing assets (classified loans with more than three months pass due, outstanding amount of troubled debt restructuring and property foreclosed) was 0.5 times of its capital fund and allowance for loan loss, which was better than average of 1.0 times for all 14 Thai universal banks, said TRIS Rating. -- End
TISCO Bank PLC (TISCO)
Company Rating: Affirmed at A
Issue Ratings:
TSCO077A: Bt2,000 million senior debentures due 2007 Affirmed at A
TSCO077B: Bt1,000 million senior debentures due 2007 Affirmed at A
TSCO07OA: Bt1,800 million senior debentures due 2007 Affirmed at A
Up to Bt3,000 million senior debentures due 2010 A
Bt1,000 million senior debentures due 2012 A
Rating Outlook: Stable
----------------------------------------------------------
Copyright 2007, 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.
The “stable” outlook reflects the likelihood that TISCO will deliver a medium-term financial performance as expected, and the settled commercial banking business platform will benefit the bank in terms of expanded scope of business and financial flexibility and liquidity. The bank’s good risk management system, its proven track record and its strong capital fund will help mitigate future downside risks from uncertain economic and business environment.
TRIS Rating reported that TISCO has had a limited branch network as a small universal bank. In terms of asset size, TISCO is ranked twelfth among all 14 Thai universal banks, with about 1% market share in 2006. At the same time, the bank had market share of 1.4% and 0.7%, respectively, in terms of loans size and deposits size. With more than 30 years of experience in the industry, TISCO has developed a proficient management team that has enabled the bank to compete in this very competitive industry. TISCO faced a small effect from applying new accounting standard (IAS39) in 2006 and is ready for BASEL II implementation in 2007 since the bank has good risk management system, efficient information management system, conservative accounting policy as well as strong capital fund and allowance for loan loss.
TRIS Rating said that TISCO’s management has a clear policy to focus on consumer finance businesses and to diversify into fee-based businesses. TISCO Group’s centralization of business operation and management system benefited the overall group’s business control and cost efficiency. During later phase of transition period to settle a universal banking system in 2006, TISCO faced a slight setback on its financial returns, but this will provide the bank with long-term opportunities in commercial banking businesses. The bank’s profitability in 2006 was limited by less favourable economic environment and rising competition in its core businesses including hire purchase and fund management.
TISCO had net profits of Bt1,546 million in 2006, a 14% drop from Bt1,791 million in 2005. Its return on average assets (ROA) declined from 2.5% in 2005 to 1.9% in 2006, while its return on average equity (ROE) also decreased from 14% to 12%. At the end of 2006, TISCO’s non-performing assets (classified loans with more than three months pass due, outstanding amount of troubled debt restructuring and property foreclosed) was 0.5 times of its capital fund and allowance for loan loss, which was better than average of 1.0 times for all 14 Thai universal banks, said TRIS Rating. -- End
TISCO Bank PLC (TISCO)
Company Rating: Affirmed at A
Issue Ratings:
TSCO077A: Bt2,000 million senior debentures due 2007 Affirmed at A
TSCO077B: Bt1,000 million senior debentures due 2007 Affirmed at A
TSCO07OA: Bt1,800 million senior debentures due 2007 Affirmed at A
Up to Bt3,000 million senior debentures due 2010 A
Bt1,000 million senior debentures due 2012 A
Rating Outlook: Stable
----------------------------------------------------------
Copyright 2007, 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.