Fitch Affirms Bank of China (Thai) at 'AAA(tha)'; Outlook Stable

KEY RATING DRIVERS
Parent's Support Underpins Rating: BOCT's ratings are based on shareholder support from its parent, Bank of China (Hong Kong) Limited (BOCHK; A/Stable/a). Fitch believes there is a very high probability that BOCT would receive extraordinary support from its parent, if needed.

The national ratings also take into account the relativities of BOCT's support-driven credit profile within the Thai national rating universe. BOCT's 'AAA(tha)' rating reflects the lowest level of default risk compared with other issuers rated on the Thai national rating scale, based on the parent's strong ability and propensity to provide support.

Strategically Important to Group: Fitch considers BOCT as a strategically important subsidiary of BOCHK. BOCT has a small market presence in Thailand, but supports the parent's south-east Asian strategy. Thailand is one of the largest markets in the region, with growing trade and investment ties with China. BOCT's strategy is closely linked to that of the parent, which should lead to strengthening regional connectivity, enhanced integration of operating capacity, and improved competitiveness.

Closely Integrated with Group: BOCT is 99.99%-owned by BOCHK with clear name and brand-sharing with the parent. The board of directors is controlled by BOCHK, and key executives are appointed by the group. Moreover, the bank's operations, liquidity and risk-management policies and procedures are closely aligned with those of BOCHK. There is ongoing evidence of operational and financial support, such as the centralisation of key functions to the group and the provision of interbank credit lines.

RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
There may be negative rating action on BOCT ratings if BOCHK's ability to support its subsidiary declines, which may be evident from a downgrade in the parent's Long-Term Issuer Default Rating (IDR). Any rating action would also consider the relative strength of BOCT's support-driven rating relative to other entities on the Thai national rating scale.

There could also be downside to BOCT's ratings if Fitch sees a material decline in the parent's propensity to support BOCT. This may be indicated by a reduction in BOCHK's ownership to below 75% (with the presence of a significant minority shareholder), along with weakening control over the management of BOCT or signs of reduced financial support. However, Fitch does not expect any change in support propensity over the near-to-medium term.

Factors that could, individually or collectively, lead to positive rating action/upgrade:
BOCT's National Ratings are already at the top end of the scale, and there is no rating upside.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
BOCT's National Ratings are linked to BOCHK's Long-Term IDR.

Additional information is available on www.fitchratings.com

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