Profits at top banks fall more than 50% in 3rd quarter

[ExpatOilWorker]

Worth reading: https://www.reuters.com/article/us-thailand-economy-debt/buyers-of-thai-distressed-assets-plan-big-purchases-as-debt-payment-holiday-ends-idINKBN27719E

 

About 6.89 trillion baht ($221 billion) of outstanding Thai debt - or 42% of total lending - has been under relief programmes that include payment deferment and reduction, interest rate reduction and restructuring.

 

“The amount of debt being sold in the market is so great that we don’t have time to choose,” he said, noting it had acquired debt with a face value of 12 billion baht at an average 84% discount in the first half.

[Leaver]

12 minutes ago, jabis said:

Now on the other hand now that they don't carry 40Bn of NPL's, can go back to issuing even more loans, as they're performing better than ever, lol.     

Yes, write off the loss, then go back to loaning to more bad debtors.  ????   

[Cake Monster]

19 minutes ago, ExpatOilWorker said:

Worth reading: https://www.reuters.com/article/us-thailand-economy-debt/buyers-of-thai-distressed-assets-plan-big-purchases-as-debt-payment-holiday-ends-idINKBN27719E

 

About 6.89 trillion baht ($221 billion) of outstanding Thai debt - or 42% of total lending - has been under relief programmes that include payment deferment and reduction, interest rate reduction and restructuring.

 

“The amount of debt being sold in the market is so great that we don’t have time to choose,” he said, noting it had acquired debt with a face value of 12 billion baht at an average 84% discount in the first half.

If I have this right, 42% of all the Thai Debt is under " Special Mention Loans " , is that correct.

I knew the problem was big, but this is something else if correct, and the issue is going to grow 

[ExpatOilWorker]

3 minutes ago, Cake Monster said:

If I have this right, 42% of all the Thai Debt is under " Special Mention Loans " , is that correct.

I knew the problem was big, but this is something else if correct, and the issue is going to grow 

Nope, 42% took the opportunity to get some sort of benefit from the debt memorandum. That could mean anything from restructuring, deferred interest payments to kicking the can down the road before defaulting.

Even solid creditors will restructure from time to time, especially if the government is throwing in some freebies.

According to BOT actual SM loans is about 10%.

[Airalee]

5 hours ago, xylophone said:

The "personal consumption" line looks a little worrying and it's been said for a long time that Thais are clocking up personal debt at quite a rate, but I wonder exactly what that line covers as the credit card debt is not particularly high?

It looks as if the “personal consumption” line is the total sum of the 4 lines below it.

[Banana7]

10 minutes ago, ExpatOilWorker said:

Nope, 42% took the opportunity to get some sort of benefit from the debt memorandum. That could mean anything from restructuring, deferred interest payments to kicking the can down the road before defaulting.

Even solid creditors will restructure from time to time, especially if the government is throwing in some freebies.

According to BOT actual SM loans is about 10%.

And those SM loans at the end of June 2020 (Q2), as reported by BOT in August 2020, were 1.22 trillion baht. For your convenience, SML metadata/definition from BOT is attached. See my early post (5th or6th) in this thread for SML data from BOT.

FI_SM_001_ENG(1).PDF

Edited October 25, 2020 by Banana7

[ExpatOilWorker]

6 minutes ago, Banana7 said:

And those SM loans at the end of June 2020 (Q2), as reported by BOT in August 2020, were 1.22 trillion baht. For your convenience, SML metadata/definition from BOT is attached.

FI_SM_001_ENG(1).PDF 191.93 kB · 0 downloads

So as of June 2020 SM loans were 7.76%. Not all will turn sour and become NPL, but more is of course on the way.

 

https://www.bot.or.th/App/BTWS_STAT/statistics/BOTWEBSTAT.aspx?reportID=906&language=eng

[bkk6060]

Certainly glad I repatriated my 800,000 b I would not trust their decisions if this continues.

[moogradod]

We have substantial amounts in THB across the Thai banking landscape and I am not talking a mere 800K.

 

Any idea when is the time to act (what would be the trigger) and how ? We do not have accounts abroad. Before you embark on bashing me: There was a good legal reason for that. Convert to cash ? Gold ? and put it somewhere safely (which would not be easy at all) ?

[Barnabe]

23 minutes ago, moogradod said:

We have substantial amounts in THB across the Thai banking landscape and I am not talking a mere 800K.

 

Any idea when is the time to act (what would be the trigger) and how ? We do not have accounts abroad. Before you embark on bashing me: There was a good legal reason for that. Convert to cash ? Gold ? and put it somewhere safely (which would not be easy at all) ?

Everyone will give you a different answer. IMO there won’t be a systemic failure so you’re safe.

 

On the other hand it is a terrible risk for you, a foreigner, to have all or even most  financial assets in Thailand. This is true even if you have a permanent residency and live full time in Thailand.

 

I would keep at least 50% in your home currency if that is the euro, gbp or dollar; if not then half in home currency, half in dollar, gbp, euro or all three.

 

You will incur exchange rate risk but there is nothing you can do at this point.

 

In other words: start transferring now, possibly on a monthly basis to spread the FX risk.

 

 

 

 

Edited October 25, 2020 by Barnabe

[Leaver]

1 hour ago, moogradod said:

Any idea when is the time to act

Yesterday.

 

1 hour ago, moogradod said:

Convert to cash ? Gold ? and put it somewhere safely (which would not be easy at all) ?

Get a bank account in Singapore.  

[moogradod]

58 minutes ago, Leaver said:

Get a bank account in Singapore.  

You mean in 1 year when I can fly there and may as well return ?

We have quite a lot in ICBC which is actually a Chinese Bank. But the branch here is Thai and subject to what we are discussing here - or not ?

 

Besides, I want the money to be in Thailand, be it in form of property, cash, gold or whatever.

[moogradod]

2 hours ago, Barnabe said:

Everyone will give you a different answer. IMO there won’t be a systemic failure so you’re safe.

That is the most important thing.

2 hours ago, Barnabe said:

 

On the other hand it is a terrible risk for you, a foreigner, to have all or even most  financial assets in Thailand. This is true even if you have a permanent residency and live full time in Thailand.

Not for me. Most of the money is owned by my Thai wife anyway.

[Leaver]

1 minute ago, moogradod said:

You mean in 1 year when I can fly there and may as well return ?

We have quite a lot in ICBC which is actually a Chinese Bank. But the branch here is Thai and subject to what we are discussing here - or not ?

 

Besides, I want the money to be in Thailand, be it in form of property, cash, gold or whatever.

HSBC in Thailand will most likely be able to open for you a Singapore bank account.  No need for you to go to Singapore, but I do not know this for sure.  I know it was possible some time ago.  

 

If you can't move the bulk of your funds to your home country, given your home country is a safe haven in the current global circumstances, Singapore is a good option.  

 

Why ask when is the time to act, and then say you want your money to remain in Thailand?  Makes no sense.  The whole idea of acting is to get your money out of Thailand.  

[Leaver]

4 minutes ago, moogradod said:

Not for me. Most of the money is owned by my Thai wife anyway.

If a Thai bank/s fail, it's not just farang that lose, it's every account holder of the bank, including Thai's. 

 

Just because she is Thai, and in Thailand, is no protection from losing the funds.  

[Barnabe]

10 minutes ago, moogradod said:

That is the most important thing.

Not for me. Most of the money is owned by my Thai wife anyway.

 

Did she earn it, or was it your money before?

 

If the latter, you're taking a huge risk there, way bigger than any possible Thai bank failure. What are you going to do if she wakes up one day and decides she doesn't need you any more?

[moogradod]

5 minutes ago, Barnabe said:

If the latter, you're taking a huge risk there, way bigger than any possible Thai bank failure. What are you going to do if she wakes up one day and decides she doesn't need you any more?

Thank you very much. I feel relieved. If this risk is considered way bigger than any bank failure I can sleep extremely well tonight ! Difficult to believe for a majority of TV members. I know her for more than 17 years now - and I am very well aware that even then change is a principle of life. But makes me smile anyway. I wish everybody to accomplish the seemingly impossible and meet the perfect partner ???? like I did.

[moogradod]

26 minutes ago, Leaver said:

Why ask when is the time to act, and then say you want your money to remain in Thailand?  Makes no sense.  The whole idea of acting is to get your money out of Thailand.  

No, this is no option for me, but to take out the money and buy some property or gold or have it in cash stored and distributed in safes across the country is.

[Barnabe]

14 minutes ago, moogradod said:

Thank you very much. I feel relieved. If this risk is considered way bigger than any bank failure I can sleep extremely well tonight ! Difficult to believe for a majority of TV members. I know her for more than 17 years now - and I am very well aware that even then change is a principle of life. But makes me smile anyway. I wish everybody to accomplish the seemingly impossible and meet the perfect partner ???? like I did.

 

There is a high chance that everything is OK and you will never have a problem.

 

But the question is - why take the risk? That's what's called a catastrophic risk. It hits once and you're in the gutter. It's the kind of risk no-one should ever expose themselves, under any circumstances. Note that I am not advocating total separation of assets like many here in this forum. There are various shades of gray. But you seem to be on the other extreme of it, and that is never good.

[Leaver]

34 minutes ago, Barnabe said:

What are you going to do if she wakes up one day and decides she doesn't need you any more?

What is he going to do if she doesn't wake up one day, or crashes the motorbike, and leaves everything to the kids?  

[Leaver]

16 minutes ago, moogradod said:

No, this is no option for me,

Why is that?

[moogradod]

11 hours ago, Leaver said:

What is he going to do if she doesn't wake up one day, or crashes the motorbike, and leaves everything to the kids?  

He is going to inherit everything exept the land. Thailand is one of the few countries in the world to allow allocation of your estate after your death to anyone you desire provided you have a valid will. Could be your neighbor instead of your kids. We have everything in a Thai Will and an executor is appointed. When I then die afterwards, the estate goes to the kids.

[Rimmer]

An off topic post has been removed, there is a Bitcoin forum where you can ask about that subject, thank you

[Leaver]

On 10/26/2020 at 9:21 AM, moogradod said:

He is going to inherit everything exept the land. Thailand is one of the few countries in the world to allow allocation of your estate after your death to anyone you desire provided you have a valid will. Could be your neighbor instead of your kids. We have everything in a Thai Will and an executor is appointed. When I then die afterwards, the estate goes to the kids.

Will the house float in mid air, above the land?  ????

[moogradod]

22 hours ago, Leaver said:

Will the house float in mid air, above the land?  ????

Reminds me of Miyasakis "Laputa, Castle in the sky". You are right, for a house this would not work. My wife has some land and a house already, these assets go to her daughter when she dies according to her existing will. For any other house she would buy - same thing. I may only own what I am legally capable of. No problem at all.

[Leaver]

3 minutes ago, moogradod said:

Reminds me of Miyasakis "Laputa, Castle in the sky". You are right, for a house this would not work. My wife has some land and a house already, these assets go to her daughter when she dies according to her existing will. For any other house she would buy - same thing. I may only own what I am legally capable of. No problem at all.

Statistically, the usually older farang spouse passes away first, so no problem with legalities. 

 

However, should the Thai spouse pass away first, that can cause a farang some problems, not to mention, it's usually the farang that has paid for the house / condo.  

 

The benefactor/s of the estate may evict, or sell the property.  

 

This needs to be considered with estate planning here.  

[Leaver]

On 10/25/2020 at 6:48 PM, Barnabe said:

On the other hand it is a terrible risk for you, a foreigner, to have all or even most  financial assets in Thailand. This is true even if you have a permanent residency and live full time in Thailand.

 

This would also be true even if there was no Covid.