TRIS Rating Assigns “A+/Posiitve” Ratings for New Senior Debentures of “BAY”
TRIS Rating Co., Ltd. has assigned the “A+” ratings for the proposed issues of Bt15,000 million and Bt5,000 million in senior debentures of Bank of Ayudhya PLC (BAY). At the same time, TRIS Rating has affirmed the company rating of BAY at “A+” and has also affirmed the rating of BAY’s subordinated debentures (BAY13NA) at “A”.
The rating outlook is “positive”. The ratings reflect improved BAY’s profile, solid capital base, strong retail franchise value, and improving risk management, all of which have been enhanced by strategic support from GE Capital Asia Pacific Ltd. (GE), a foreign partner. This should help improve BAY’s business growth and profitability in the medium term. However, the ratings are constrained by the bank’s high legacy non-performing loans (NPL), and a less favorable economic and business environment, all of which might limit business growth and profitability of the bank.
The “positive” outlook reflects the expectation of a substantial improvement in BAY’s financial performance and its asset quality, particularly in profitability. In addition, the bank is expected to gain benefits from synergies with GE in terms of growing profitable assets and market share expansion in consumer banking. The prudent risk management practice to control asset quality is also essential for the bank under loans portfolio expansion period.