Fitch Affirms Bank of China (Thai)'s Long-Term National Rating at 'AAA(tha)'; Stable Outlook
Fitch Ratings (Thailand) has affirmed the National Long-Term Rating of Bank of China (Thai) Public Company Limited (BOCT) at 'AAA(tha)' with a Stable Outlook, and the National Short-Term Rating at 'FBank of China+(tha)'.
KEY RATING DRIVERS
BOCT's National Ratings are based on institutional support from its parent, Bank of China (Hong Kong) Limited (BOCHK; A/Stable/a). Fitch believes that there is an extremely high probability that BOCT would receive extraordinary support from its parent, if needed. Fitch considers BOCT as a strategically important subsidiary of BOCHK. BOCT has a small market presence, but supports the parent's franchise in south-east Asia; for example, it services Chinese clients with business interests in Thailand, the region's second-largest economy. Furthermore, there is full ownership by BOCHK, brand- and name-sharing, close integration, and ongoing operational and financial support from BOCHK to BOCT.
RATING SENSITIVITIES
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; hence, there is no rating upside.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Fitch may downgrade BOCT's ratings if BOCHK's ability to support its subsidiary declines, as may be indicated by a downgrade in its Long-Term Foreign Currency Issuer Default Rating, although Fitch would also assess the relative strength of BOCT's support-driven rating relative to other entities on the Thai National Rating scale.
BOCT's ratings could also be downgraded if Fitch sees a material decline in the parent's propensity to provide extraordinary support to BOCT; for example, a reduction of BOCHK's ownership to below 75%, with weakening control over the management of BOCT as well signs of a weakening financial commitment. However, Fitch does not expect any change in support propensity over the near to medium term.
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 driven by the ratings of its parent, BOCHK.
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