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 challenging operating climate in Thailand. KTB plays a key role in the Thai economy by providing credit to important economic sectors and acting as the payment-processing agent for the government and state-owned agencies. Due to its
