S&P upgrades TMB's Hybrid Tier1

The outlook on the counterparty credit ratings on TMB Bank is negative, indicating that there is at least a oneinthree possibility of the bank's ratings being lowered in the intermediate term if there is continual material deterioration in its core earnings or asset quality.

The threenotch rating differential between the counterparty credit rating on TMB Bank (BB+/Negative/B) and the issue rating reflects the junior subordinated nature and embedded interest deferral feature of the hybrid notes, according to Standard and Poor's methodology.

The bank has successfully completed a capital infusion exercise and its adjusted total equity ratio has improved to about 3 per cent in fiscal 2007 from 1.90 per cent in fiscal 2006. TMB Bank's core profitability has remained relatively stable with net interest margin improving to 2.7 per cent and noninterest income increasing by 25 per cent to Bt8.3 billion as of

December 31, 2007. Nonetheless, nonperforming loans increased by 12.4 per cent to Bt72.4 billion in the last quarter of fiscal 2007.

The Nation