TAIB Bank - ratings affirmed with 'negative' outlook, and then withdrawn

However, the Outlook for the ratings was changed to 'Negative' (from 'Stable') in view of TAIB Bank's sustained large loss at both operating and net levels in H1 2012, the consequent negative impact on its capital base, and the significant decline in liquidity. The Support Level of '4' was maintained, denoting only a moderate likelihood of support and some degree of uncertainty about the ability and willingness of potential supporters to provide assistance in case of need. The ratings were then withdrawn at the request of the Bank due to the ongoing restructuring programme.

In the last review of July 2011, CI had noted that the Bank's capital base had been eroded by continued substantial losses in the face of an ongoing difficult investment climate. An unfavourable cost base compounded the losses, suggesting that a major cost cutting programme was necessary.

Although impairment provisions appear to have declined in 2011 and into H1 2012, TAIB Bank's capacity to generate income remains under significant pressure. The cost base continues to exceed gross income by a large margin, straining both liquidity and capital. In CI's view, TAIB Bank's performance in H1 2012 was worse than had been expected, underscoring the mounting challenges associated with restoring profitability in the current environment.