Fitch Revises Outlook on Thailand's EXIM and KTB to Stable; Affirms IDRs

The rating action follows Fitch's revision of the
Outlook on Thailand's Long-Term Foreign-Currency IDR to Stable from Positive on
17 March 2020; see "Fitch Revises Outlook on Thailand to Stable; Affirms
at 'BBB+'", dated 17 March 2020.

Other ratings for EXIM and KTB are not affected; a
full list of rating actions is at the end of this commentary.

KEY RATING DRIVERS

The Support Ratings and Support Rating
Floors of EXIM and KTB are driven by Fitch's expectation of support from the
Thai sovereign (BBB+/Stable). The banks' Long-Term IDRs are driven by their
Support Rating Floors.

EXIM's Long-Term Foreign-Currency IDR is
at the same level as that of the sovereign. This is underpinned by its
important policy role, close linkage to the Thai government and its legal
status as a state policy bank set up under specific legislation. EXIM is wholly
owned by the Ministry of Finance and was set up to support the country's
import-export sector and to promote cross-border investment and trade.

EXIM's sound financial performance has
meant that it has not needed extraordinary support, although it does have a
record of support, including revenue compensation from implementing government
initiatives. See EXIM's most recent rating action commentary, "Fitch
Affirms Thailand's EXIM at 'BBB+'; Outlook Positive," dated 6 November
2019.

KTB's Long-Term Foreign-Currency IDR is
driven by its Support Rating Floor, and is underpinned by Fitch's belief that
there is a high probability of extraordinary support from the government in
times of need. The central bank has named KTB as one of Thailand's five
domestic systemically-important banks. Fitch also believes that KTB is
strategically important to the government, as it is the only commercial bank
that is majority-owned by the state (55%). KTB's Short-Term IDR is consistent
with Fitch's approach for bank ratings that are driven by sovereign support.
For more detail, see KTB's rating action commentary, "Fitch Affirms Krung
Thai Bank; Outlook Stable," dated 12 April 2019 and "Fitch Upgrades
Thai EXIM's ST Rating to 'F1'; Revises Outlooks on EXIM, IBANK and KTB to
Positive," dates 25 July 2019.

RATING SENSITIVITIES

Fitch believes that EXIM and KTB's
Long-Term IDRs and Support Rating Floors are sensitive to changes in Thailand's
sovereign rating. Any change in Thailand's sovereign rating may affect the IDRs
of EXIM and KTB in a similar direction as long as there were no significant
changes in Fitch's assumptions about the state's propensity to support the
banks.

ESG CONSIDERATIONS

Unless otherwise disclosed in this
section, the highest level of ESG credit relevance is a score of 3 - ESG issues
are credit neutral or have only a minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by the entity.

KTB and EXIM have an ESG Relevance Score
of 4 for Governance Structure due to potential influence of the state on the
banks' risk governance given the government's controlling stakes and its
control over the banks' board and management, which has a potentially negative
impact on the credit profile, and is relevant to the rating in conjunction with
other factors.

Additional information is available on
www.fitchratings.com

• ข่าวBank of Thailand
• ข่าวFitch Ratings
• ข่าวo:fin
• ข่าวen