Fitch Ratings upgrades long-term rating of Thai SME Bank to ‘AAA’

BANGKOK, May 28 (TNA) - Fitch Ratings (Thailand) has upgraded its national long-term rating to ‘AAA(tha)’, from ‘AA+(tha)’, for Small and Medium Enterprise Development Bank of Thailand (SME) Bank, reflecting Fitch’s reassessment of SME Bank’s importance in supporting the Thai government's policies. Besides, the Thai Ministry of Finance has better supported the liquidity of SME Bank, showing that SME Bank is likely to receive steady support from the government, which is its major shareholder, as the SME Bank has played important roles in implementing government strategies. The Finance Ministry may also compensate SME Bank for losses resulting from some of its public mandates to support local SMEs facing financial problems. Weak asset quality has, however, become a major challenge for Thailand's SME Bank and it is implementing a business rehabilitation plan to lower non-performing loans and non-performing financing and to improve their origination and collection systems. The Finance Ministry has, meanwhile, monitored the liquidity of the Thai SME Bank closely and has, sometimes, supported its liquidity with deposits from the state and lending from financially-strong state banks. SME Bank has also expected significant capital injection from the Thai government either late this year or early next year if its rehabilitation plan is successful. (TNA)