Fitch Rates Hana Bank’s Baht Bonds ‘AAA(tha)’

Fitch Ratings-Bangkok/Singapore – 25 January 2012: Fitch Ratings (Thailand) has assigned Hana Bank’s (Hana) senior unsecured bonds of up to THB10bn with a minimum maturity of three years a National Long-Term ‘AAA(tha)’ rating.

 

Hana’s Long-Term Foreign Currency Issuer Default Rating (LTFC IDR) of ‘A-’ with Stable Outlook is at the same level as Thailand’s Long-Term Local Currency Issuer Default Rating (LTLC IDR) of ‘A-’/Stable, which is correlated to ‘AAA(tha)’ on the Thai National Rating scale.

Hana’s LTFC IDR is driven by the bank’s Support Rating Floor of ‘A-‘, reflecting Fitch’s expectation of an extremely high probability of support from the South Korean government (‘A+’/Positive), given its systemic importance as one of the major commercial banks in Korea.

 

Hana’s ‘AAA(tha)’ issue rating could be downgraded if Hana’s LTFC IDR were to be downgraded below Thailand’s LTLC IDR of ‘A-’. Such a scenario would arise if Korea’s sovereign rating is downgraded or the bank’s systemic importance to the Korean economy is reduced. However, either scenario is not expected in the near-term. If Thailand’s LTLC IDR rating were to be upgraded, then Hana’s baht bonds would also be downgraded.

 

Hana is the sixth-largest bank in Korea with total assets of KRW159trn (or USD141bn) at end-Q311. The bank has a sizable franchise in the Korean banking system, holding 8.6% and 9.7% of the system’s total assets and deposits, respectively, through its nationwide branch network at end-Q311. Hana is the flagship subsidiary of Hana Financial Group.