Large Thai Banks have strong capital ratios to protect against failures: Fitch Ratings

By The Nation

 

Thailand’s large banks should all be able to comply with new capital requirements for domestic systemically important banks (D-SIB) deemed “too big to fail”, said Fitch Ratings.

 

The banks named as D-SIBs all have capital ratios that are well above the new minimum requirements that will be phased in by 2020, Fitch said in a statement on Friday.

 

The D-SIB framework, announced by the Bank of Thailand (BoT) on September 25, is a step towards full implementation of international regulations, Basel III, that impose more stringent capital requirements on banks that could have large negative effects on the financial system in the event of their failure or impairment.

 

The five largest commercial banks, which have market shares of 10 per cent to 16 per cent of consolidated assets, have been classified as D-SIBs, which is in line with market expectations, said Fitch. The sixth-largest bank has a market share of only around 5 per cent.

 

The selection of these banks was in line with Basel recommendations, and took into account their size, interconnectedness, substitutability and complexity, said Fitch Ratings.

 

Source: http://www.nationmultimedia.com/detail/Economy/30328032

 

-- © Copyright The Nation 2017-09-29

I wonder why such a declaration is needed at this time. Is there a crisis brewing?

3 hours ago, trogers said:

I wonder why such a declaration is needed at this time. Is there a crisis brewing?

Quite the opposite..Thailand is taking steps to join the world banking system and is publicizing the fact that they meet certain standards  already.

All I know is Thai banks sailed through the 2008-2010 financial crisis without a hitch, while banks in the United States and Europe were dropping like flies.

10 hours ago, OMGImInPattaya said:

All I know is Thai banks sailed through the 2008-2010 financial crisis without a hitch, while banks in the United States and Europe were dropping like flies.

Actually, a few banks had to be sold to foreign banks, thus, you now have banks like UOB and DBS.

31 minutes ago, trogers said:

Actually, a few banks had to be sold to foreign banks, thus, you now have banks like UOB and DBS.

I don't recall the reason being that they were in danger of failure from the financial crisis...I think it had more to do with foreign banks wanting to enter the Thai banking market (Thailand had liberalized entry of foreign banks) and the easiest way to do it was to buy an existing Thai bank.

1 hour ago, OMGImInPattaya said:

I don't recall the reason being that they were in danger of failure from the financial crisis...I think it had more to do with foreign banks wanting to enter the Thai banking market (Thailand had liberalized entry of foreign banks) and the easiest way to do it was to buy an existing Thai bank.

 

Thai Danu Bank

 

You can Google for

 

Nakornthon Bank sold to Standard Chartered

 

Radanasin Bank sold to UOB

Edited September 30, 20178 yr by trogers

Folclosures comming up ? 

 

4 hours ago, trogers said:

 

Thai Danu Bank

 

You can Google for

 

Nakornthon Bank sold to Standard Chartered

 

Radanasin Bank sold to UOB

You're mixing up the 1997 'Tom Yam' crisis and the 2008 sub-prime crisis. The ones you mentioned happened after the 1997 collapse of the Baht. OMG is correct about 2008.

Thai banks being sold and liberating the financial sector to foreigners are separate issues.

 

Liberating exercise was carried out from 2004-7, before the sub-prime fiasco.

 

https://www.imf.org/External/NP/seminars/eng/2007/fsa/pdf/s1/2_S1_speaker2.pdf

 

Thailand has so far underwent only one financial crisis, in 1997.

 

The sub-prime fiasco had insignificant effects to the Thai financial sector.