Moody's boosts Thai banking outlook from stable to positive

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Moody's boosts Thai banking outlook from stable to positive

By THE NATION

 

 

Following the change in outlook on Thailand's Baa1 sovereign rating to positive from stable, Moody's Investors Service has changed its outlook for the Thai banking system to positive from stable.

 

The change reflects Moody's view that any upgrade of the sovereign rating will translate into stronger government capacity to provide support for banks.

Despite the boost in outlook, Moody's points out that several challenges remain for Thai banking.

 

Specifically, Moody's expects the operating environment for Thai banks will deteriorate over the next 12-18 months as weak export growth and tourist arrivals will weigh on the country's economic growth.

 

The formation of new non-performing loans among small and medium-sized enterprises will accelerate as the financial health of these borrowers, particularly those in export-related sectors, weakens along with the broader economy.

 

Yet any deterioration of asset quality in the next 12-18 months will be mild and mitigated by the banks' strong loss-absorbing buffers.

 

Capitalisation, funding and liquidity will all remain strong. Loan to deposit ratios should remain below at 100 per cent at most banks, while funding will continue to be underpinned by the predominance of retail deposits.

 

A further increase in credit costs, which have weighed on profitability in recent years, is unlikely despite growing asset risks because banks have already built significant reserves against loan losses. Net interest margins (NIMs) will also be broadly stable.

 

In view of the positive outlook, Moody's could upgrade the ratings of a number of Thai banks as it has upgraded the sovereign rating, to incorporate larger rating uplifts for government support.

 

Full story: https://www.nationthailand.com/business/30377942

 

-- © Copyright The Nation Thailand 2019-11-01

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[Pravda]

baht to the moon

[Pravda]

Great time to invest in depressed Pattaya real estate 

[Pravda]

Western currency going down the toilet. Don't get caught with your pants down.

[steven100]

this can't be right   !   …..  most TV farang keep telling us Thailand is going down in everything, and everyone is leaving. ….   lol

[Scot123]

10 hours ago, steven100 said:

this can't be right   !   …..  most TV farang keep telling us Thailand is going down in everything, and everyone is leaving. ….   lol

Did you even bother to read the whole article and unravel the spin? Ah it's you, so obviously not. You should hold your head in shame if you are a farang. 

[Redline]

My money is moving out of Thailand

[Jack Mountain]

Maybe in the near future it's time to buy cheap euro's with Thai baht ....