Bank of Ayudhya ratings unaffected by bank's announcement to acquire HSBC's Thailand retail business

Stocks and Financial Services Press Releases Thursday January 26, 2012 14:23
Mumbai--26 Jan--Asian Banker

Mumbai, Janyary 26th 2012 - Standard & Poor's Ratings Services said today that its counterparty credit rating on Thailand-based Bank of Ayudhya Public Co. Ltd. (BAY; BBB-/Stable/A-3) is not affected by the bank's announcement that it will acquire the Thailand retail banking business of The Hongkong and Shanghai Banking Corp. Ltd. (HSBC; AA-/Stable/A-1+; cnAAA/cnA-1+). The acquisition is small and is unlikely to affect BAY's credit profile. We expect our risk adjusted capital ratio for the bank to remain moderate in the next two years.

HSBC's retail banking business in Thailand includes credit cards, personal loans, mortgages, and deposits. The assets (excluding cash) account for only 1.4% of BAY's assets as of Dec. 31, 2011. The deal size is less than 3.5% of the bank's total capital at the end of 2011. The acquisition fits with BAY's strategy to increase its retail loan portfolio, which will increase to 46% of total loans after the deal, from 45% now. The transaction may also provide cross-selling opportunities to the customers acquired from HSBC. The deal is subject to approval by shareholders and the Bank of Thailand. BAY expects the deal to be completed in the first quarter of 2012. (January 26 2012)--

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