Singapore, December 18, 2019 — Moody’s Investors Service has today affirmed the Baa1 foreign currency long-term bank deposit ratings of Bangkok Bank Public Company Limited’s (BBL) with a positive outlook.
Moody’s has also affirmed BBL’s Baseline Credit Assessment (BCA) and adjusted BCA at baa1.
BBL’s outlook is positive, in line with the positive outlook on Thailand’s sovereign rating (Baa1 positive).
Today’s rating action follows the announcement by BBL on 12 December 2019 that it will acquire a 89.12% stake in Bank Permata Tbk (P.T.) (Baa3 review for upgrade, ba1) from Standard Chartered Bank (A1 stable, baa1) and PT Astra International Tbk.
The transaction is subject to regulatory approvals from the Bank of Thailand and Indonesia’s Financial Services Authority, as well as approval from the BBL’s shareholders. The affirmation of BBL’s baa1 BCA reflects Moody’s expectation that the bank’s standalone credit profile, as reflected by its solvency and liquidity, will broadly remain stable after the planned acquisition.
The proposed acquisition will weaken BBL’s capitalization, because the bank plans to fund the purchase with internal resources and funding sources other than new equity. Also, Bank Permata’s asset quality, as reflected by its stock of non-performing loans and performing restructuring loans, is weaker than that of BBL.
Nevertheless, Moody’s expect that the impact on BBL’s financial profile from the acquisition is manageable in terms of asset quality and liquidity because of Permata’s relatively small balance sheet compared to the acquirer.
Also, BBL’s strong funding and liquidity, as reflected by its dominant market share in Thailand, will also continue to support its standalone credit profile. BBL’s baa1 adjusted BCA is in line with its baa1 BCA, because the bank does not benefit from affiliate support. The affirmation of the ratings of Tier-2 securities reflects the fact that ratings and assessments are notched from BBL’s adjusted BCA.
Moody’s affirmation of BBL’s Baa1 foreign currency long-term bank deposit ratings and A3 long-term counterparty risk ratings and A3(cr) counterparty risk assessments take into account the bank’s baa1 adjusted BCA and Moody’s assumption of very high level of support from the Government of Thailand during times of stress.
The support assumption is based on the bank’s systemic importance arising from its 11% and 13% market shares in system loans and deposits, respectively, as of 30 June 2019. Moody’s does not have particular governance concerns for BBL and does not apply corporate behavior adjustment to the entities.
WHAT COULD CHANGE THE RATINGS UP
Bangkok Bank’s foreign currency long-term senior unsecured and bank deposit ratings could be upgraded if the sovereign rating is upgraded.
WHAT COULD CHANGE THE RATINGS DOWN
Factors that could result in a downgrade include a downgrade of Thailand’s sovereign rating. Bangkok Bank’s BCA could be downgraded if its asset quality and capital deteriorate significantly post-acquisition.
The Importance of E-Wallets for Online Gaming Sites
With e-wallets and cryptocurrency being the most relevant options, banks have been put on the side burner, especially when e-wallets and cryptocurrency allow for fast electronic transfer, that is done instantly.
Thai Government to issue Bt50 bln ( $1.57 bln)Savings Bonds to fund COVID-19 Relief Measures
The special savings bonds are available via the “Sasom Bond Mung Kung” e-wallet, abbreviated to “Sor Bor Mor” in Thai on Krungthai Bank’s Pao Tang mobile app, and through four dealer banks. The minimum purchase of these bonds is 1,000 baht, without no maximum. Interest is paid twice a year.
BANGKOK (NNT) – Thailand’s Public Debt Management Office (PDMO) plans to issue “Ying Aom Ying Dai” (the more you save, the more you earn) government savings bonds, worth 50 billion baht, next month, aiming to use the funds to finance state projects to ease the impacts of the pandemic.(more…)
Subscribe via Email
How the COVID-19 situation may affect Thailand’s export sector
Thailand's export sector could face damage of 200-300 billion baht if the situation cannot be brought under control within six...
Thai baht becoming the region’s worst-hit currency in COVID pandemic
According to data from its tourism ministry as well as the World Bank, Thailand had only a little over 34,000...
Asia’s slow rate of vaccination is a thorn in the region’s economic recovery
Southeast Asia has been hit badly. Daily infections for Indonesia, Thailand, Vietnam are at their worst, on a seven-day moving...
TAT expects 850 billion baht ($25.7 bln) in tourism revenue after successful reopening
The Tourism Authority of Thailand (TAT) has set this year’s revenue target at 850 billion baht, 300 billion of which...
Download 1xBet mobile and play all over the world
Placing profitable bets or playing in a casino is now possible comfortably even without being tied to a computer. It...