Strong franchise as second-largest commercial bank in Thailand. Adequate capitalization. Majority government-owned bank, used as a conduit to support government initiatives. Profitability constrained by IAS39-related provisioning expenses and challenging operating environment. Challenging operating environment in Thailand. The counterparty credit ratings on Krung Thai Bank Public Co. Ltd. (KTB) reflect the bank's strong franchise as Thailand's second-largest commercial bank and the implicit support from its ultimate majority owner, the government of Thailand (foreign currency BBB+/Stable/A-2; local currency A/Stable/A-1). The ratings on KTB are also underpinned by its adequate business and financial profiles. However, asset quality will be a key challenge in fiscal 2007 as the bank will need to manage its legacy NPLs, particularly as deterioration is expected given the current
