Any Thai Banks In Trouble?

[freitag1]

I'm not planning to bring lots of money to Thailand anytime soon but it would be great if anyone has some background information on what bank is considered "safe".

[londonthai]

there is a thread in the general forum about mass withdrawals from bangkok bank http://www.thaivisa.com/forum/Bangkok-Bank-t227085.html

[aurelius]

I'm not planning to bring lots of money to Thailand anytime soon but it would be great if anyone has some background information on what bank is considered "safe".

All Thai banks are protected by the Government's deposit insurance scheme which provides 100% protection for deposits & will do so for at least the next 3 years.

Banks took write-offs in Q3 for any exposures they had to Lehman and CDO's etc, so that's done and out of the way. The large Thai banks, including Bangkok Bank, have capital ratios well in excess of the international standards, as much as 17% in some cases, and have a very strong ratio of deposits to loans due to the large provincial networks and strong deposit base. Stability of the major Thai banks is not a concern.

[MeetJohnDoe]

No. As a consequence of their near deathbed experience of a decade ago, they have actually be very conservative during the credit bubble of the past few years. The Thai banking system is actually one of the healthiest around, not highly leveraged, and funded primarily by their Thai domestic deposit base.

Edited December 3, 2008 by MeetJohnDoe

[MeetJohnDoe]

I should clarify a bit: I am referring to the larger private Thai banks, e.g., Bangkok Bank, Thai Farmers (Kasikorn), SCB, TMB, BOA. I don't know anything about the financials of state run banks like Krung Thai, GSB, etc., but being state backed I don't assume any would be allowed to fail.

[neverdie]

I'm not planning to bring lots of money to Thailand anytime soon but it would be great if anyone has some background information on what bank is considered "safe".

All Thai banks are protected by the Government's deposit insurance scheme which provides 100% protection for deposits & will do so for at least the next 3 years.

Banks took write-offs in Q3 for any exposures they had to Lehman and CDO's etc, so that's done and out of the way. The large Thai banks, including Bangkok Bank, have capital ratios well in excess of the international standards, as much as 17% in some cases, and have a very strong ratio of deposits to loans due to the large provincial networks and strong deposit base. Stability of the major Thai banks is not a concern.

Out of interest....are you aware if there is any limit to that govt backing of thai banks.....have you got a link or somewhere you know where i may be able to read about it??

[Losangels]

Not that I know of though Bank Thai is/was heavily exposed to the subprime mortgage investment in the States.

I don't think BOT will disclose negative data about any bank here in fear a bank run.

[thailandjunkie]

Difficult for many observers to believe but Thai banks ARE some of the safest institutions around. Fully protected depositors and very low loan/deposit ratios. Previous comment about being burned in 97 and 98 was correct....in recent years Thai banks lending policies have been ultra conservative. Similar to most other countries in Asia that got hammered during the Asian crisis...with the notable exception of Korea whose citizens/institutions appear to have far shorter memories than elsewhere.

www.thailandjunkie.blogspot.com

[ballbreaker]

I'm not planning to bring lots of money to Thailand anytime soon but it would be great if anyone has some background information on what bank is considered "safe".

All Thai banks are protected by the Government's deposit insurance scheme which provides 100% protection for deposits & will do so for at least the next 3 years.

Banks took write-offs in Q3 for any exposures they had to Lehman and CDO's etc, so that's done and out of the way. The large Thai banks, including Bangkok Bank, have capital ratios well in excess of the international standards, as much as 17% in some cases, and have a very strong ratio of deposits to loans due to the large provincial networks and strong deposit base. Stability of the major Thai banks is not a concern.

Out of interest....are you aware if there is any limit to that govt backing of thai banks.....have you got a link or somewhere you know where i may be able to read about it??

Check the following link.

http://thailawforum.com/news/2008/news-June3-08.html

[digitalfunda]

Hi Friends,

I have got job offer from K bank, the job is of a project manager handling one of the IT projects...my billing is in dollers somewhere around 5k/month.

Can you guys tell me about that Bank...any layoffs...how stable that bank is...

Thanks a lot...

-

[12DrinkMore]

No. As a consequence of their near deathbed experience of a decade ago, they have actually be very conservative during the credit bubble of the past few years. The Thai banking system is actually one of the healthiest around, not highly leveraged, and funded primarily by their Thai domestic deposit base.

Their business model seems to be pay depositors <1% and charge debtors at 5% plus. A very healthy margin and business model, which was recently criticised in the press, as the spread is too(?) large.

During the heyday of banks in the UK some twelve months ago, I could never understand how they could afford to offer me 6.0% tax free offshore and then put mortgages on the market in the UK at 5.5%. I assumed that the hefty "arrangement fee" gave them a profit. But then I did not understand the Fractional Reserve System, so in the end I suppose my 6% interest should be compared to the 55% they were actually raking in on the loans based on my deposit....

And still members of TV are asking "why is the Baht so strong"?

[cclub75]

No. As a consequence of their near deathbed experience of a decade ago, they have actually be very conservative during the credit bubble of the past few years. The Thai banking system is actually one of the healthiest around, not highly leveraged, and funded primarily by their Thai domestic deposit base.

I agree 100%. But... we shall remember that a few banks are in difficult position (case of TMB, AKA Thai Military Bank, of which ING bought a large stake last year... ING being now in very hot water, talk about irony... plus another one, I forgot the name, but a stake was sold recently to a bank from Malaysia).

[cclub75]

Difficult for many observers to believe but Thai banks ARE some of the safest institutions around. Fully protected depositors and very low loan/deposit ratios. Previous comment about being burned in 97 and 98 was correct....in recent years Thai banks lending policies have been ultra conservative. Similar to most other countries in Asia that got hammered during the Asian crisis...with the notable exception of Korea whose citizens/institutions appear to have far shorter memories than elsewhere.

Again... event though I agree... watch out you can't say "ultra conservative".

Check the evolution of credit : we are still at +20 % year on year !

And trap number 2 : a "good loan" in 2008. Can become a "very bad loan" in 2009...

Past results shouldn't blind us about the perspectives in the future.

Edited January 26, 2009 by cclub75

[mommysboy]

I'm not planning to bring lots of money to Thailand anytime soon but it would be great if anyone has some background information on what bank is considered "safe".

Nobody knows, but as far as it goes Thai banks avoided exposure to sub prime/CDS writedowns as they were unable to partake because of their perceived vulnerability. Ironically then, they are now quite strong but will be subject to the usual impairments accompanied by a strong recession/depression. as far as I'm aware personal debt is fairly high in Thailand, widescale unemployment is predeicted as is a dip in the housing market. So, it's not possible to be sure if your deposit will be secure, but unlikely you would ever lose any money in an account IMHO. I have sizeable balance in SCB and am not worried.