Thai Banks

[MHM]

With banks worldwide going down like dominoes, you have to wonder how safe our money is in Thai banks. Does anyone 'in the know' have any info on how vulnerable they are, which ones at risk etc? Don't want to start a panic by rumours but we really do need to know.

[Soutpeel]

With banks worldwide going down like dominoes, you have to wonder how safe our money is in Thai banks. Does anyone 'in the know' have any info on how vulnerable they are, which ones at risk etc? Don't want to start a panic by rumours but we really do need to know.

Thai banks in current situation are "safe" as the banks anywhere else on the planet...Who really knows what will happen...

[midas]

With banks worldwide going down like dominoes, you have to wonder how safe our money is in Thai banks. Does anyone 'in the know' have any info on how vulnerable they are, which ones at risk etc? Don't want to start a panic by rumours but we really do need to know.

many that have lived in Thailand much longer than me have said that apparently

they did learn a lot from 1997 and their standards are much higher now

- let us hope !

Edited September 30, 2008 by midas

[cclub75]

There is one important factor : less competition.

It gives surely to thai banks a good card.

They are carefuly protected by the authorities. And even between them, they are very policed.

Typical of the so called "asian competition" AKA family.

Now you wouldn't let down family, would you ?

Last point : insurance of deposits.

A new law has been voted, that changes the rules (but slowly, over 5 years). The point is : this year, we still have insurance for unlimited deposits in thai banks. Unlimited. That should be enough, right ?

More info on the Deposit Protection Agency Act here :

Edited September 30, 2008 by cclub75

[yabaaaa]

Have Thai banks lent money to people who cant pay it back?

[OlRedEyes]

Have Thai banks lent money to people who cant pay it back?

Of course not!

Let me see. Thai management. Not as greedy, corrupt, stupid as Western management. Nah. Can't be.

I love it when people quote spokesmen about how solid their institutions are.

What do you expect to hear? 'Hey everybody, we're in deep crap and will probably fold next week'?

I'm not saying Thai banks will fail. I am saying the risk, like everywhere else, is high.

Edited September 30, 2008 by OlRedEyes

[PhilHarries]

Does anyone 'in the know' have any info on how vulnerable they are, which ones at risk etc?

I rather think that those "in the know" a currently too busy moving their funds to safe havens to be hanging around internet fora handing out free advice.

It wasn't that long ago that the people "in the know" were too busy running outfits like Lehman bros and AIG to be handing out free advice. We can thank the Lord for that.

[dotcom]

Phrase it slightly differently. Are Thai banks as safe as French banks?

Answer: YES

In both cases the government will pump in taxpayer dollars so that no bank collapses. Face.

[MHM]

I'm guessing that Thai banks are not as heavily into toxic mortgages as the western banks. Hence risk seems less. But those of us around in the '97 crash remember some 50-odd Thai banks going bust through non-performing loans (NPL). You'd think that the lesson on NPL would have been learned but I'm not so sure

[jubby]

I've been wondering what the chances of a Thai bank losing all its savings deposits , sort of a run on the bank situation.

We take the children for Ballet lessons every saturday morning. My wife sits with the other wives who are usually small to medium business people and they usually discuss the usual , what to eat and exchange knitting patterns etc.. Recently the conversation has been almost always about Gold. How they do not trust the banks and are thinking about taking out there savings and buying gold. I know Thais usually like to have some gold but as I don't usually discuss financial matters with my wife, and I'm pretty sure its not there usual topic of conversation. It got me thinking.

[whatsoever]

A few friends have informed me today that they cant get money from Bangkok Bank ATMs. They have tried to phone but they just get a recorded message saying that they have techinical problems.

Edited October 4, 2008 by whatsoever

[jfchandler]

On the immediate prior post, the BKK Bank ATMs had a video notice up on their screens that they were going to be down for system maintenance from Friday night to early Sat morning. Now being Sat afternoon, they still had the notice up....but I used one and everything worked just fine.

On the general threat topic, as mentioned above, Thailand has a law, that applies both to Thais and foreigners, that ensures the safety of deposits in the event of a bank failure. It's the DPA law mentioned above in an answer. The law's timelines for having your money returned, were a Thai bank to fail, are not quite as swift as those in the USA with the FDIC. But I think it's pretty safe to assume you can rely on the law here.

As noted, the new law will gradually reduce over the coming 5 years the maximum amount per Thai bank account that is insured by the Thai government. But for this year, that amount in unlimited.... And the maximum amounts will gradually decrease.... But even the lower limits reached 5 years out will be enough to cover most people re their Thai bank deposits...

And, the law's limits only apply to one individual's accounts at one bank. So, the same person could have other accounts at other Thai banks and those would be each separately covered for the applicable maximum amount.

All that said, I'd still prefer to keep as much money as possible under the USA's FDIC insurance system, which has a long track record of promptly honoring any defaults. I'd likewise try to minimize the amounts I keep here, just out of an abundance of caution.

[SirPaul]

I'm guessing that Thai banks are not as heavily into toxic mortgages as the western banks. Hence risk seems less. But those of us around in the '97 crash remember some 50-odd Thai banks going bust through non-performing loans (NPL). You'd think that the lesson on NPL would have been learned but I'm not so sure

It is not about what the banks policy is with its customers, etc. It is all about international investments and how much the bank was investing abroad. The level of such investment will detail how much involvment the bank has with the sub-prime market.

[chiang mai]

Have Thai banks lent money to people who cant pay it back?

Periodically the Thai government, via the BOT will set up a new company and transfer all non performing loans from the commercial banks. Exactly what happens to the newly formed company is anyone's guess but the effect is that the banks are cleansed of their failed lending. It's kinda like what the US and UK governments are doing at present but without all the drama.

[junkofdavid2]

It would HELP you analyze if you checked their credit ratings on:

http://www2.standardandpoors.com/portal/si...,0,0,0,0,0.html

www.moodys.com

www.fitchratings.com

But of course, it's not foolproof because these ratings agencies also have conflict of interest (they're paid by the same banks themselves to do the rating analysis). Lehman and Washington Mutual had "investment grade" ratings of BBB- or higher when they went bust; but they were both on "creditwatch negative".

Just as important as the rating (BBB or BBB- or A or AA or whatever), you should also check if the creditwatch is "negative, stable, or positive". For example Rating is "BBB- creditwatch negative." That means that even though it's BBB- (which is 'investment grade'), creditwatch is negative, meaning it is likely to get a ratings downgrade soon and could be re-rated as a "junk investment" or even go bankrupt.

Note: Do not confuse the - or + sign after the letters as being "creditwatch negative or positive". The - or + sign after the letters is just a sub level of the rating. BBB- is lower than BBB which is lower than BBB+ .

*BBB- or "BBB negative" is different from "BBB negative, creditwatch negative". It's possible for a company to be "BBB negative, creditwatch positive". Meaning credit rating is BBB-, but it's likely to have a ratings upgrade in the near term. "BBB-, creditwatch stable" means that the rating is not likely to change in the near term.

Edited October 16, 2008 by junkofdavid2

[fxm88]

Article from the end of 2004: http://www.bangkokpost.net/ecoreviewye2004/finance.html

Local banks will face another key challenge in 2005, when a new law establishing a deposit insurance agency is expected to be passed... Since 1997, the central bank's Financial Institutions Development Fund has offered a blanket guarantee for all deposits within the banking system... Deposit insurance will be phased in over a four-year period, with coverage of up to 50 million baht given in the first year and falling to just one million by the fourth year.

Did such a law ever get passed? Did such an agency ever get set-up? Does it cover foreigner accounts?

[tracer5050]

Who really knows just hope for the best, Things have to get better just hope you can swim till then

[jfchandler]

Article from the end of 2004: http://www.bangkokpost.net/ecoreviewye2004/finance.html

Local banks will face another key challenge in 2005, when a new law establishing a deposit insurance agency is expected to be passed... Since 1997, the central bank's Financial Institutions Development Fund has offered a blanket guarantee for all deposits within the banking system... Deposit insurance will be phased in over a four-year period, with coverage of up to 50 million baht given in the first year and falling to just one million by the fourth year.

Did such a law ever get passed? Did such an agency ever get set-up? Does it cover foreigner accounts?

The answers to the above questions are yes, yes, and yes....

News reports have been posted here in other banking threads containing the details of all this.

[camerata]

I notice small banks are offering higher interest rates (around 4%) for fixed deposits than the big banks. Yesterday, I heard an employee of Kasikorn Bank saying that Siam City is starting to have problems. I assume the small banks are short of money, but does this mean they are already having serious problems?

[junkofdavid2]

Just found out...

Thanachart Bank has a Fitch Rating of "A" which is even higher than Bangkok Bank with a rating of BBB.

*(Highest rating is AAA, which is given to the U.S. Treasury)

I believe this is because Canada's Bank of Nova Scotia bought a 25% stake in Thanachart.

Edited October 28, 2008 by junkofdavid2

[lannarebirth]

Just found out...

Thanachart Bank has a Fitch Rating of "A" which is even higher than Bangkok Bank with a rating of BBB.

*(Highest rating is AAA, which is given to the U.S. Treasury)

I believe this is because Canada's Bank of Nova Scotia bought a 25% stake in Thanachart.

I just completed a 3 month CD with Thanachart yesterday. I was very pleasantly surprised how positive the experience was. I think I may give them more business in the future.