Fitch Rates THB Notes Issued by SMBC#s Bangkok Branch #AAA(tha)#

Stocks and Financial Services Press Releases Friday August 11, 2017 16:36
Bangkok--11 Aug--Fitch Ratings

Fitch Ratings (Thailand) has today assigned a National Long-Term Rating of 'AAA(tha)' to Sumitomo Mitsui Banking Corporation's (SMBC; A/Stable/F1) upcoming three-year Thai baht-denominated senior unsecured notes. The notes will be issued by SMBC's Bangkok Branch. The proceeds will be used for general operating purposes.

SMBC's Bangkok Branch is one of the largest foreign-bank branches in Thailand, with total assets of THB345 billion at end-March 2017.
KEY RATING DRIVERS

The National Rating on the notes is based on SMBC's Long-Term Foreign Currency Issuer Default Rating (IDR) of 'A', which is above Thailand's Long-Term Local-Currency IDR of 'BBB+'. Therefore, it corresponds to 'AAA(tha)', the highest rating on Thailand's National Rating scale.

SMBC's IDR is based on the banking group's Viability Rating (VR) of 'A', which reflects its solid capital position, manageable market risk, healthy liquidity and stable profitability. SMBC is a core subsidiary of Sumitomo Mitsui Financial Group, Inc (SMFG), which is one of the largest financial groups in Japan by total assets. The Outlook on SMBC's IDR was revised to Stable from Negative following the affirmation of Japan's sovereign rating at 'A' and the revision of the Outlook from Negative on 27 April 2017 (Please see Fitch Revises Outlook on Japan to Stable; Affirms at 'A'. ).

RATING SENSITIVITIES
The rating on SMBC's senior unsecured note at 'AAA(tha)' is already the highest level on the national scale, limiting the possibility of a rating upgrade.

A downgrade could be triggered if SMBC's Long-Term Foreign-Currency IDR were to be lowered to below Thailand's Long-Term Local-Currency IDR, either by a downgrade of SMBC itself or an upgrade of Thailand above SMBC. However, both scenarios are unlikely in the near term - given the current two-notch gap between SMBC and Thailand.


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