Thai commercial banks stand strong despite crisis: DPA

[webfact]

Thai commercial banks stand strong despite crisis: DPA

By THE NATION

 

 

The Deposit Protection Agency (DPA) has said the state of commercial banks in Thailand is not that bad judging by the fact that their capital adequacy ratio is averaging at 19.2 per cent – a lot higher than the 8.5 per cent specified by the central bank.

 

DPA director Songpol Chevapanyaroj said the profit of each commercial bank in the second quarter of 2020 stood at around Bt30 billion, down from Bt60 billion earned in the second quarter of 2019.

 

However, he said, this was not a problem because Thailand’s financial institutions have adapted to the current situation, unlike what happened during the 1998 Tom Yum Kung crisis.

 

The director added that his organisation has earmarked Bt129 billion to support commercial banks in case of bankruptcy.

 

Despite the Covid-19 crisis, Songpol said financial institutions in Thailand have grown, with total bank deposits rising by 6 per cent in late March and 8 per cent in the first half of 2020.

 

Total bank deposits this year are expected to show a growth of around 4 to 6 per cent from last year. DPA forecasts that the economy this year will contract by 8.5 to 9 per cent, similar to the Finance Ministry’s estimates.

 

Source: https://www.nationthailand.com/news/30395407

 

-- © Copyright The Nation Thailand 2020-10-01

 

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[Enzian]

I look at these kinds of articles because there is no deposit insurance at present for Foreign Currency Deposit accounts, which is what I keep for my Non-O renewal. I know there is a lot of BS flying around, but I do tend to accept statements like the above more or less at face value. 

[hotchilli]

6 hours ago, webfact said:

The director added that his organisation has earmarked Bt129 billion to support commercial banks in case of bankruptcy

I think Prayuts "pot" is bigger than the banks?

[klauskunkel]

Nothing and nothing can shake Thai Banking!

Where have I heard similar sentiments before? Ah, yes, Thai Tourism...

[tomazbodner]

This is one reassurance that banks are fine too many... Why trying to convince us that all is fine? Because it isn't?

 

Listen - most Thais are up to their necks in debt for cars and condos and houses. Many of them have lost their jobs. Banks overstretched due to competition between them. Yet these same banks are still desperate to give loans during this time.

 

Banks that are in good standing can easily reject risky loans and ride out the storm. Desperately trying to get business talks of all the opposite of what we're trying to be reassured of.

[Barnabe]

Maybe you’re right, but it’s in no one’s interest to let any Thai banks fail. Whatever happens I’m sure the gov will bail them out. I’m not too worried about my  400k.

[Bender Rodriguez]

3O billion profit per bank, not bad

 

they almost give NOTHING anymore (1 percent net) but loans are still 5,6,7,8 percent

 

your 1 million in deposit, ok, your  800k retirement money in deposit, that you cannot touch, they can lend 8.000.000 baht to other people at the rate of 5,6,7,8 percent or CC 'loans' at 20 percent...

 

I wish I could lend person to person system at 5 percent per YEAR and I would be happy

[Leaver]

1 hour ago, Barnabe said:

Maybe you’re right, but it’s in no one’s interest to let any Thai banks fail. Whatever happens I’m sure the gov will bail them out. I’m not too worried about my  400k.

How far down the creditors list do you think a farang will be?  ????

 

I would say a "bail in" is more likely than a bail out.  A percentage of your 400k will be seized to prop up the bank.    

[Scot123]

The banking in Thailand is far from secure. Their assets especially property is not reality and when you examine as I did when looking to buy a house many years ago quickly found that the properties advertised were upto 100% more than a new build in the same area. Take into account that Thai people are superstitious and think bad luck and ghosts when looking at an old property. I believe these assets are not for sale but are there to cook the books. Just my observations someone else said 300% over priced bot that long ago.

[Leaver]

45 minutes ago, Bender Rodriguez said:

3O billion profit per bank, not bad

 

they almost give NOTHING anymore (1 percent net) but loans are still 5,6,7,8 percent

 

your 1 million in deposit, ok, your  800k retirement money in deposit, that you cannot touch, they can lend 8.000.000 baht to other people at the rate of 5,6,7,8 percent or CC 'loans' at 20 percent...

 

I wish I could lend person to person system at 5 percent per YEAR and I would be happy

And what has the bank got when a high percentage of those loans at 5,6,7,8 percent are not repaid?  That is what is happening here, on an unprecedented scale.  

 

Many Thai's couldn't even repay their loans even if they are at 1.5% interest.  No job means no income, which means no loan repayments, which equals a loss for Thai banks.    

[Barnabe]

Just now, Leaver said:

How far down the creditors list do you think a farang will be?  ????

 

I would say a "bail in" is more likely than a bail out.  A percentage of your 400k will be seized to prop up the bank.    

I never said it was impossible. But Thailand has a pretty good reputation in the world of finance, making the baht one of the top 25 most traded currencies in the world despite all the restrictions.

They also cleaned up house since 1997 and have zero foreign denominated debt. 
 

Do you really think the gov and BoT are going to sacrifice that hard earned reputation and bail in banks when they can just print money for free and bail them out like everyone else in the world is doing?

[Leaver]

3 minutes ago, Barnabe said:

I never said it was impossible. But Thailand has a pretty good reputation in the world of finance, making the baht one of the top 25 most traded currencies in the world despite all the restrictions.

They also cleaned up house since 1997 and have zero foreign denominated debt. 
 

Do you really think the gov and BoT are going to sacrifice that hard earned reputation and bail in banks when they can just print money for free and bail them out like everyone else in the world is doing?

Look at America in 2008.  Eg.  Lehman Bothers.  Not to mention, all of the other financial institutions that were bailed out.

 

You don't think it could happen here?   

[Barnabe]

11 minutes ago, Leaver said:

Look at America in 2008.  Eg.  Lehman Bothers.  Not to mention, all of the other financial institutions that were bailed out.

 

You don't think it could happen here?   

Possible yes, likely... not sure. And if so I would expect a Chinese style slow burn collapse rather than a systemic one like in the USA in 2008.

 

Lehman Brothers was an investment bank, not a retail one. The loss fell on the shareholders, as it should. That's the reason I don't invest any money in Thai companies, especially banks. But I can sleep at night knowing the chances of losing my 400k as a retail bank customer are slim.

 

All retail banks were bailed out by the Fed in 2008 as were European banks from 07 to 12 through money printing.

 

If they got away with it, why wouldn't Thailand do the same? Especially now in COVID times when everyone is printing money again like crazy with no visible consequences. There might be consequences down the line such as rampant inflation, but again everyone is doing it and Thailand will do the same if necessary.

[Cake Monster]

12 hours ago, webfact said:

The director added that his organisation has earmarked Bt129 billion to support commercial banks in case of bankruptcy.

This piddly little amount might support the Banks for maybe an Hour or Two if things go really bad,

[Leaver]

On 10/1/2020 at 3:32 PM, Barnabe said:

Possible yes, likely... not sure.

If there is any doubt, then there is no doubt. 

 

Get your money out while you still can, and while it's still your money to do so.

 

The current situation is unprecedented. Visa requirement seasoned money should be the least of your concerns.  Banks and immigration regulations are two separate things.  One can not guarantee the other.     

[Barnabe]

2 hours ago, Leaver said:

If there is any doubt, then there is no doubt. 

 

Get your money out while you still can, and while it's still your money to do so.

 

The current situation is unprecedented. Visa requirement seasoned money should be the least of your concerns.  Banks and immigration regulations are two separate things.  One can not guarantee the other.     

 

One does not guarantee the other, but the lack of money guarantees I won't have a visa.

Look if I could choose, I'd prefer not to have the 400k in the account. But in reality there is no choice, and like I said previously, I'm not losing my sleep over a low chance of parting with some of that money if everything crashes down.

If that indeed does happen, have other hedges that will more than make up for the loss.

 

Edited October 2, 2020 by Barnabe

[Leaver]

6 minutes ago, Barnabe said:

 

One does not guarantee the other, but the lack of money guarantees I won't have a visa.

Look if I could choose, I'd prefer not to have the 400k in the account. But in reality there is no choice, and like I said previously, I'm not losing my sleep over a low chance of parting with some of that money if everything crashes down.

If that indeed does happen, have other hedges that will more than make up for the loss.

 

You are still focused on the visa, not your money.  Stop being a puppet, for a lousy sticker in your passport.

 

Did you consider, with a bail in, the Thai government could seize some, most, or possibly all of your deposit, then basically make a "margin call" on you for your visa, which means you throw more money in for next year's passport sticker, or leave. 

 

Don't think because of all the farang here, and the bright neon lights, that it can't happen.

 

I pay an agent, not because I don't have the 800k to put in a Thai bank, but because the 800k in a Thai bank was always a waste of money for me, when the same 800k was earning more than the agent's fee's, and I maintained control over my money. 

 

Now, those with 400k or 800k in a Thai bank not only face a loss on their capital, but their deposit is now at significant risk, and for what, a sticker in a passport.   

 

Focus on the security of your money, not a visa, otherwise, you could be paying 800k or 400k to live here for 1 year, whick makes for a very expensive visa, indeed.  

[Enzian]

I agree with Leaver in post #17, and I really really don't like having that 30G in a FCD account, even if it's true that I could recover from its loss. But at the moment I like even less the prospect of contributing to the institutionalized corruption of the agent system. It's a question that needs to be under constant review. I almost hope that there will be some combination of reasons to move back to the US and take that dough home with me, but for now we're all in limbo.

[Barnabe]

12 hours ago, Leaver said:

You are still focused on the visa, not your money.  Stop being a puppet, for a lousy sticker in your passport.

 

Did you consider, with a bail in, the Thai government could seize some, most, or possibly all of your deposit, then basically make a "margin call" on you for your visa, which means you throw more money in for next year's passport sticker, or leave. 

 

Don't think because of all the farang here, and the bright neon lights, that it can't happen.

 

I pay an agent, not because I don't have the 800k to put in a Thai bank, but because the 800k in a Thai bank was always a waste of money for me, when the same 800k was earning more than the agent's fee's, and I maintained control over my money. 

 

Now, those with 400k or 800k in a Thai bank not only face a loss on their capital, but their deposit is now at significant risk, and for what, a sticker in a passport.   

 

Focus on the security of your money, not a visa, otherwise, you could be paying 800k or 400k to live here for 1 year, whick makes for a very expensive visa, indeed.  

 

Well guys this is all news to me, I knew you could give "gifts" to speed up visa handling, but I had no idea I could pay to get rid of the 400k requirement (marriage visa). Where can I get info on how to do it?

 

I'm not sure I'd still pull the deposit, but at least there's an option to do so if needed.

[Leaver]

4 hours ago, Barnabe said:

 

Well guys this is all news to me, I knew you could give "gifts" to speed up visa handling, but I had no idea I could pay to get rid of the 400k requirement (marriage visa). Where can I get info on how to do it?

 

I'm not sure I'd still pull the deposit, but at least there's an option to do so if needed.

Prices vary, but around 20k baht will get you your 1 year visa, with no money in the bank requirement.

 

It's been debated on TV in many threads, over many years, but the use of agents works perfectly fine.  

 

There is a perception that people who use agents are people who haven't got 800k or 400k baht, and this may be true of some, but for many, such as myself, it's simply more profitable to not tie up 800k in a Thai bank for the sake of visa.  When you look at the losses on the 800k baht in a Thai bank for 1 year, it makes for an expensive visa. 

 

Of course, 400k is less loss, but the risk management is the same, when it comes to the Thai banking sector, and the Thai economy.    

 

My 800k is back home, earning around 6%, which more than covers the cost of the agent, and my money is at call, and not tied up in a bank in a third world country.  

 

Not to mention, I don't have to worry about all the other immigration rubbish for the year.  It's all part of the service.  

[Leaver]

On 10/3/2020 at 8:29 AM, Enzian said:

but for now we're all in limbo.

We may be in limbo, but currently, our money is not.  Whilst we can not travel internationally, our money still can.