Dec 30, 2023 3:29:13 GMT -5
Post by account_disabled on Dec 30, 2023 3:29:13 GMT -5
Fitch Ratings has affirmed Bangkok Bank Public Company Limited's (BBL) Foreign Currency Rating at 'BBB+' and National Rating at 'AA+(tha)'. The rating outlook is stable. This is a result of the announcement of a plan to acquire 89% of PT Bank Permata Tbk (AAA(idn)/Credit Outlook Negative) shares in Indonesia. This transaction still requires approval from a meeting of shareholders. share and related authorities. BBL expects that the transaction will be completed within the third quarter of 2020. Factors supporting credit rating Foreign currency international credit ratings and national credit rating Considered from the bank's financial strength rating (Viability Rating or VR), which reflects the strength of the bank's own credit structure. The announcement of the bank's affirmative rating and Stable outlook is based on Fitch's view that the Permata acquisition is unlikely to result in a material change to the bank's credit profile. However, the transaction shows a higher level of risk appetite and a lower risk absorption buffer. The size of the bank's assets.
The acquisition (if successful) is considered significant and will account for 9% of the bank's total assets post-merger based on the bank's estimates. In addition, the bank's capital position (which has been a supporting factor for banks' credit ratings for a long time) is likely to weaken. The Bank's Common Equity Tier 1 capital ratio may decrease to 14.5% from 17.7% from the Bank's estimates at the end of September 2019, but factors that will help cushion the current risks such as the capital ratio Provisions for non-performing loans and liquidity levels should remain stable Telegram Number Data and support the bank's credit structure after the acquisition. The acquisition of Permata is in line with BBL's business strategy to become a leading bank in the region with a more extensive business network in key markets in Southeast Asia. Fitch believes BBL is better positioned than other banks to expand its business in international markets. From the Bank's expertise in foreign affairs The bank's overseas business accounts for approximately 17% of total loans.
However, the size and complexity of the transactions may expose the bank to execution risk and may require a period of time to integrate the business and Leveraging business combinations to further increase the bank's profitability, BBL is one of the Thai banks with the strongest capital position. The ability to generate sufficient profits and pay dividends will be a measure of whether the bank can rebuild its capital position, which may have weakened after the acquisition. Factors that may affect the credit rating in the future Fitch will closely monitor banks' risk appetite and capital positions to see if they weaken more than expected. For example, A significant increase in assets with a higher level of exposure abroad. This indicates that a weakening of the bank's risk assessment standards could have a negative impact on the rating. Moreover, a significantly weaker operating performance that weakens key financial ratios in terms of asset quality and capital position could also result in the bank's credit rating being downgraded. Opportunities for upgrading the bank's rating are limited because BBL's foreign currency IDR is currently at the same level as Thailand's credit rating. (BBB+/Positive credit rating outlook).
The acquisition (if successful) is considered significant and will account for 9% of the bank's total assets post-merger based on the bank's estimates. In addition, the bank's capital position (which has been a supporting factor for banks' credit ratings for a long time) is likely to weaken. The Bank's Common Equity Tier 1 capital ratio may decrease to 14.5% from 17.7% from the Bank's estimates at the end of September 2019, but factors that will help cushion the current risks such as the capital ratio Provisions for non-performing loans and liquidity levels should remain stable Telegram Number Data and support the bank's credit structure after the acquisition. The acquisition of Permata is in line with BBL's business strategy to become a leading bank in the region with a more extensive business network in key markets in Southeast Asia. Fitch believes BBL is better positioned than other banks to expand its business in international markets. From the Bank's expertise in foreign affairs The bank's overseas business accounts for approximately 17% of total loans.
However, the size and complexity of the transactions may expose the bank to execution risk and may require a period of time to integrate the business and Leveraging business combinations to further increase the bank's profitability, BBL is one of the Thai banks with the strongest capital position. The ability to generate sufficient profits and pay dividends will be a measure of whether the bank can rebuild its capital position, which may have weakened after the acquisition. Factors that may affect the credit rating in the future Fitch will closely monitor banks' risk appetite and capital positions to see if they weaken more than expected. For example, A significant increase in assets with a higher level of exposure abroad. This indicates that a weakening of the bank's risk assessment standards could have a negative impact on the rating. Moreover, a significantly weaker operating performance that weakens key financial ratios in terms of asset quality and capital position could also result in the bank's credit rating being downgraded. Opportunities for upgrading the bank's rating are limited because BBL's foreign currency IDR is currently at the same level as Thailand's credit rating. (BBB+/Positive credit rating outlook).