Connect with us


Report casts gloom on Thai banks

Legacy Phuket Gazette



Report casts gloom on Thai banks | Thaiger

BANGKOK, June 23 (AFP) – Thailand’s banking sector plunged into fresh gloom Wednesday as US ratings agency Moody’s Investors Service said the crisis-hit industry remained “deeply impaired.” The judgment came at a time when many investors had been expecting ratings upgrades from foreign agencies for debt-laden Thai banks which have been struggling to recapitalise. In a report received here Wednesday, Moody’s said the banking sector remained in deep crisis and warned that all banks remain “heavily insolvent in true economic terms.” “Although the largest banks in the capital starved system have been able to move closer to satisfying current regulatory requirements for loan loss provisioning, the mid-sized and smaller banks remain well behind. Additionally, government assistance and/or regulatory action, including intervention, vis-à-vis these deeply impaired banks can be complicated by political considerations,” it said. Consequently, Moody’s believed that the prospects for these banks, as well as for those that have already been intervened in by the government, still remain uncertain. “The outlook for their ratings continues, therefore, to be negative.” Moody’s said debt in “less impaired” banks, including Bangkok Bank, Krung Thai Bank, Thai Farmers Bank, Siam Commercial Bank, and Industrial Finance Corporation of Thailand, was stable in the Ba3/B2 range. Moody’s said it expects that Bank of Asia’s subordinated debt, which is rated Ba2, will benefit from support by its new parent, ABN AMRO Bank NV. Weaker commercial banks, like Bank of Ayudhya and the intervened banks, including Siam City Bank and Bangkok Metropolitan Bank, were rated lower because their recapitalization requirements were more urgent and their treatment of subordinated creditors was an mmediate issue. Therefore, their outlooks were negative, Moody’s said. The report said that additional capital was desperately needed by all Thai banks. “The system’s current (June 1999) capital and loan loss reserves, less accrued interest (most of which is unlikely to be recoverable) is estimated to total only about 23 percent of gross loans.” And despite the huge amounts of capital pumped into banks as part of restructuring efforts, “much more is required.” Moody’s also said that the crisis will result in a big increase in the presence of foreign banks in the Thai system, and transform the competitive landscape over the medium and longer term. “It is a distinct possibility that a much larger, and possibly even a dominant, role will be played by foreign banks and that local banks will be marginalised.”


Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram


Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Tourism1 min ago

Will it, won’t it? October re-opening in doubt as Anutin defers to medical experts

Philippines15 hours ago

ICC opens investigation into Philippines President Duterte

World15 hours ago

American general defends “clandestine” phone calls with China

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Thailand15 hours ago

Countdown to October reopening; body of Koh Phi Phi resort manager found | Thailand News Today | September 16

Visa16 hours ago

Hungarian woman arrested in Koh Samui for 10-year overstay

Thailand16 hours ago

Nakhon Si Thammarat reports Covid outbreak at prison

Join the conversation on the Thaiger Talk forums today!
Guides17 hours ago

Most famous viewpoints in Phang Nga

Blackpink17 hours ago

Blackpink’s Lisa causes sales frenzy for Buri Ram meatballs

Thailand18 hours ago

NACC ordered to disclose their findings regarding Deputy PM Prawit’s watch scandal

World18 hours ago

“Thai Taste Therapy” launched to promote Thai cuisine worldwide

Food18 hours ago

Food and drinks to stay away from in Thailand

Thailand18 hours ago

Ode to the Comments | Thaiger Bites | Ep. 19

Pattaya19 hours ago

Pattaya reopening likely to snub nightlife, favor other attractions

Thailand19 hours ago

Epidemiologists dispatched to Phuket to help curb the spread of Covid

Phuket19 hours ago

Phuket Vegetarian Festival gets “green light” to run from October 6 to 14

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14 | Thaiger
Thailand3 days ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand7 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism7 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket7 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism7 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand7 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism7 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand8 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand8 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand8 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand8 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand8 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand8 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand8 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand8 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11