Fitch has also assigned an expected ‘BBB+(EXP)’ rating to BBL’s proposed unsecured senior notes to be issued under this GMTN programme.
The notes will be issued through BBL’s Hong Kong branch. The proceeds will be used for the bank’s general corporate purposes. The final rating on the proposed notes is contingent upon the receipt of final documents conforming to the information already received.
Key Rating Drivers
The senior unsecured notes are rated at the same level as BBL’s Long-Term Foreign-Currency Issuer Default Rating (IDR) of ‘BBB+’ as they represent unsecured and unsubordinated obligations of the bank.
BBL’s rating reflects its steady asset quality, earnings and funding and its solid domestic franchise. The bank has maintained high capital and reserve coverage, which help to counterbalance the risks of its high corporate loan concentration.
Rating Sensitivities
Any change to BBL's Long-Term IDR would have a similar effect on the GMTN programme’s and the senior unsecured notes’ ratings.
Positive rating action for BBL may be considered upon a sustained improvement in the domestic operating environment and further strengthening in the banks’ overall financial profile, absent any increase in risk tolerance, or increase in exposure to the sovereign.
A downgrade may result from an increasing risk of significant deterioration in the bank’s asset quality that leads to an erosion of profitability or capital. This could include an increasing risk appetite through rising loan concentrations or excessive loan growth in the absence of higher profitability and capital.
BBL is Thailand’s largest commercial bank by consolidated assets with an 18% share of loans and a 19% share of deposits at end-June 2013. It has a strong business franchise in large corporates and SMEs and has the largest international presence among Thai banks.