TRIS Rating Co., Ltd. has placed a “CreditAlert” with “negative” implication for the company rating of Small and Medium Enterprise Development Bank of Thailand (SME Bank). The CreditAlert action reflects SME Bank’s financial performance that is weaker than expectation, mainly due to potential contingent liability incurred from penalty charges according to interest rate swap contract, unresolved high non-performing loans (NPL), and internal organization turmoil. These factors are expected to further weaken the bank’s capital fund and financial performance in 2008. Asset quality deterioration and the bank’s weak capital fund to support NPL resolution and business growth under unfavorable economic environment are concerns. SME Bank posted a huge net loss of Bt1,065 million in December 2007 and Bt1,351 million for the first half of 2008. The bank’s NPL ratio was at 45% as of December 2007 and 50% as of June 2008. Recently, the house of representative has approved the recapitalization budget for the fiscal year 2009 worth Bt600 million for the bank.
TRIS Rating is now in the process of reviewing the company rating of SME Bank and validating the full impact of the contingent liability incurred from interest rate swap contract and will announce the rating update to the public after the analysis is complete. The current rating of SME Bank is “AA-”. -- End
Small and Medium Enterprise Development Bank of Thailand (SME Bank)
Company Rating: AA-
CreditAlert Designation: Negative
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Copyright 2008, 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.
TRIS Rating is now in the process of reviewing the company rating of SME Bank and validating the full impact of the contingent liability incurred from interest rate swap contract and will announce the rating update to the public after the analysis is complete. The current rating of SME Bank is “AA-”. -- End
Small and Medium Enterprise Development Bank of Thailand (SME Bank)
Company Rating: AA-
CreditAlert Designation: Negative
-------------------------------------------------------
Copyright 2008, 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.