What'S The Best Bank Interest Rate In Thailand?

[fletchsmile]

But the difference is, in the places where a lot of us come from, people who do these kinds of things usually end up in jail, and the applicable laws at least try to reimburse and protect the victims...

Sorry, but I do not see hoards of western bank employees being sent behind bars for the massive damage they have inflicted across Europe and the US. The debt crisis continues unabated, must be over 600 US banks that have been dissolved in the last couple of years, in the UK RBS, Northern Rock, Lloyds are utterly screwed and government owned.

There may have been the odd instance of Thai bank employees misbehaving, But in a lot of the cases I have seen or known about there has been involvement with Thai partners stealing money from accounts, which has somehow firstly been blamed on the Thai banks. Same happens all over the world.

...

Totally agree.

A lot of it comes down to foreigners not really understanding Thailand, the country they live in and having little knowledge of 90% plus of the Thais that live here. Their knowledge is unfortunately based on a few newspaper articles, and blogs - in such the "headlines" plus perhaps interaction with their Thai partner and few Thai friends they may have, which they then extrapolate to 60mio others. Of course there will be a few newspaper articles from time to time - same as other countries. I remember an employee fraud at the main branch of Nat West in the UK in the town I was living so don't see any difference - police were tracking them down. No idea what happened and if they were caught, it was probably page 14 when resolved compared to page 1 when the fraud took place. 4 threads on ThaiV quoted - wow must be rife

As to punishment. Again the average foreigner doesn't see what goes on behind the scenes and is reliant on newspapers, blogs etc. They don't seem to realise that bad news sells and good news doesn't. If they thought for a moment, why are Thai jails so overcrowded? 2,600 were touted as being put forward for pardon this year (+1 of course) similar to last year - these people have to have been in jail in the first place - they can't release people who aren't there in the first place. Hardly the sign of a country where no-one gets punished.

Of course a certain minority and elite can pay their way out of things in Thailand, but the average bank clerk is by no means in that category.

The point on bankruptcies is often seems overlooked by US citizens. Dozens of US banks go bust every year. In fact more US banks go bust every year than actually exist in total in Thailand. When was the last Thai bank bankruptcy they can remember? A decade or so back?

On the whole, managing your Thai assets in Thailand with a Thai bank isn't much different to back home in terms of core banking products. In fact as the product range is narrower and simpler, it still fulfils most peoples basic banking needs, but without the disasters, complexities and tail risks that come along from western banking over extending themselves in fancy risk products.

I use overseas banks for managing overseas assets and Thai banks for Thai assets. The key is understanding the differences. Unfortunately many people don't. I find them comparable overall although as many other things in life, each has pros and cons.

Edited November 25, 2011 by fletchsmile

[fletchsmile]

At the moment the Thai bank guarantee is THB 50 mio (= GBP 1mio) per person per bank. In the UK its far below that. Yes in Thailand it will drop to THB 1mio or around GBP 20k next year = 1/4 of that in UK. However, Thai banks as a whole are in much better shape than their UK counterparts. The difference is, in the last few years UK banks have raised protection from GBP 35k to around GBP 85k because of all the risks and problems they have. In contrast Thailand has been much safer so they are now bringing it down again. You need to bear in mind not just the loss given default, but also the probability of default. I'd say there's more chance of an RBS depositor calling on that guarantee and its hassles than BKK Bank.

You also need to bear in mind your average balance here vs average balance in UK. The guarantees are there to protect the average person. In Thailand, household income and wealth is lower than UK. Thailand has never put itself forward as an international banking centre. Its main aim is to look after people in Thailand, and provide levels of service and guarantees that fit the countries needs. Believe it or not they don't arrange their banking needs around the average expat on TV

Of course the wise man spreads his money around, taking note of the guarantees in each place, and plays to the strengths and weaknesses of each system. In contrast the whinger just moans everything isn't perfect, and the world doesn't revolve around their needs

[TallGuyJohninBKK]

No one is moaning or complaining the world doesn't fit their needs.

But some of us are simply pointing out the facts to readers here to may not otherwise know them.

Considering that the required Thai bank deposit minimum for retirement extensions is 800,000 baht, a lot of farang may be keeping those amounts or larger in a Thai bank account or more than one account.

It's a pretty significant shift for the Thai bank deposit insurance to drop from 50 million baht to 1 million baht guaranteed by the government overnight, as it will in August 2012.

The fact that the average Thai won't likely be affected by that is pretty irrelevant, since the readers here on TV aren't average Thais. They're farangs who have their own financial profiles that are different from the average Thai.

[12DrinkMore]

12, I think you've been drinking way to much...

Hassle free system for opening accounts here??? Maybe you should start reading the myriad of TV posts on farang getting jerked around trying to open Thai bank accounts...

Last week I opened a new account inside of 20 minutes with just my passport and deposited 600,000 Baht cash into it.

Try that in the UK or the States. You'd probably be arrested on the spot.

As for criminals in jail, well, Bernie Madoff is sitting in federal prison. And at least in the U.S., I can pretty much guarantee you that the common bank employee who engages in fraud or stealing money from bank customers is almost certain to face a stay in federal prison... No paying off the police to walk away or skipping town there. Bank fraud is a federal crime, meaning the criminals are dealing with the FBI, not the local police, typically. Once they're caught, they rarely walk free.

I was referring to the massive losses that pension schemes, savers and other investors have suffered at the hands of the politicians, Ben Bernanke, Mervyn King, Goldman Sachs and the rest. The Greeks lied with the aid of Goldman Sachs in order to defraud the citizens of Europe.

These losses go into the trillions, have destroyed whole economies and I don't see many of this lot behind bars.

And apart from the criminal law system, people who have been victimized by fraud have a real right and ability to pursue civil litigation against the offenders for reimbursement and damages.

Try suing your government for fraud. You have no rights there.

When was the last time you heard of a farang in Thailand prevailing in that kind of a civil case?

I would like to see some concrete statistics over this. You see, mistakes can be made and rectified, these cases are never published.

It is only ever the vocal minority that we read about.

I no longer hold any significant amount of GBP, USD and EUR as I consider that the cynical manipulation of these currencies by the respective politicians and central banks to persistantly debase, devalue and manipulate in the cause of putting cash into the bankers' pockets intolerable.

Time for another beer.

Edited November 25, 2011 by 12DrinkMore

[fletchsmile]

...

Edited November 25, 2011 by fletchsmile

[TallGuyJohninBKK]

All I can say is... if that's your opinion of the western governments like the U.S. and Europe, you really must be a huge fan of the Thai government.

All I know is, if I put my money in a U.S. bank, I know it's going to be safe and returned to me, regardless of what happens with the bank. No one's ever lost a dime on FDIC-insured accounts that stayed within the applicable limits for the various points in time, $100,000 previously and $250,000 per account since the last couple years.

In the world of Thai banking, I'm sure, most of the time things are likewise going to be fine. But if things go bad in some way, a farang in Thailand is likely to be on the losing end of the stick.... far moreso than in their home country. No real police. No real civil justice system. And a forthcoming government deposit insurance limit of $33,000 per person per bank... Hardly a foundation for great confidence.

[fletchsmile]

Understood some people have gripe about Thai banks, Thai visas, Thai governments etc. But it does get a bit tiring to read the same gripes on every single thread about banks whether relevant or not. Try reading OPs post again:

I bring money back from the states every year and deposit it in my Thai bank account to draw on as needed each month. Where can I get the best interest rate for the money sitting in the bank or is there a liquid investment account available in Thailand? I generally pull out between 10 and 15 thousand baht a month from the account.

Thanks in advance...

15,000 baht x 12 months = 180,000 baht. The guy deposits money every year.

By my calcs WFT would he be interested in having deposit protection for USD 250,000 = THB 7.5mio in Thailand in a cash account.

If he spends 180k a year. 5 years cash @ 900k is still within the THB 1mio guarantee. If he needs a retirement visa, which he hasn't mentioned, then do the sensible thing of having two banks anyway. Always useful to have 2 accounts with different banks as a back up, regardless of country.

----------------------------------------

BTW For the 60 or so US banks that have gone bankrupt this year, it's not just the monetary amount guarantee, but the time and hassle involved as well.

Back on topic,

BOT website will show normal bank account rates only for standard accounts

Individual banks website are useful for checking up to date rate and various special accounts.

Look at the quality of the banks services not just rates. Bangkok Bank, Kasikorn, SCB, Bank of Ayudhaya are the better banks generally. TMB is OK but behind the others generally in services, technology etc

If choosing fixed rate deposits go for the non-standard tenors. eg 5 months, 7 months, etc Instead of the usual 1m, 3m, 6m, 12m

Edited November 25, 2011 by fletchsmile

[12DrinkMore]

All I can say is... if that's your opinion of the western governments like the U.S. and Europe, you really must be a huge fan of the Thai government.

All I know is, if I put my money in a U.S. bank, I know it's going to be safe and returned to me, regardless of what happens with the bank. No one's ever lost a dime on FDIC-insured accounts that stayed within the applicable limits for the various points in time, $100,000 previously and $250,000 per account since the last couple years.

In the world of Thai banking, I'm sure, most of the time things are likewise going to be fine. But if things go bad in some way, a farang in Thailand is likely to be on the losing end of the stick.... far moreso than in their home country. No real police. No real civil justice system. And a forthcoming government deposit insurance limit of $33,000 per person per bank... Hardly a foundation for great confidence.

I am no fan of any government.

Yes, I'm sure that your USD's will be returned to you.

But Bernanke has promised to keep interest rates at zero until 2013 so inflation will rip into your cash. And where the exchange rate will be is impossible to guess, the USD is still the world's reserve currency but there is an increasing amount of discontent over this situation.

Good luck, but I would not trust Bernanke and Obamah to preserve the value of USD's in your account.

[TallGuyJohninBKK]

Good posts both above... Good Night Gents!

[fletchsmile]

Just posted on another thread an account I have that may be of interest.

[bangkokburning]

So according to John. In a time of unparallelled international banking instability the BOT has decided that it will insure banks less, not more AND appears banks are not stepping up to cover the potential loss with private insurance (?). And mind you - 1m is only 200k more than your money on hold for retirement. It's peanuts.

Personally, maybe it was 1997 but the whole Thai Govt/Banking monopoly/1997 still gives me long pause. Thailand will never see 800k of my money sitting in her banks.

Yes, employees raid accts all the time and not only that but safety boxes on occasion. As a farang - you are next to helpless.

[bangkokburning]

I also bring much of my funds in annually in cash. The rate is far better exch on a day of my choosing. I don't get hit with transf fees either. It is a bit of a hassle but to me, it's worth the US150.

If anyone would like to know one of if not the safest most prudent bank in the US you can PM me. It is an A+ rated bank that even asshat Cramer on MSNBC has fanned. Stock has taken a beating as of late but is no reflection of its soundness. It is very well capitalized, does not deal with credit cards, super scrutinizes all loans. Over 100+ years old.

Has simple online banking. A pull here costs US1 I think. ATMs in US may be same or US1.50. They do have simple online banking and billpay.

Edited November 26, 2011 by bangkokburning

[Sirone]

Hi,

How do you bring money back form state, in cash with you? Orsend from state to your bank account in Thailand? What is the best way to do? Iwant to do the best way too. Can u advise me, what is the best way?

Thanks for help

[TallGuyJohninBKK]

So according to John. In a time of unparallelled international banking instability the BOT has decided that it will insure banks less, not more AND appears banks are not stepping up to cover the potential loss with private insurance (?). And mind you - 1m is only 200k more than your money on hold for retirement. It's peanuts.

Here's a Thailand Law Forum article on the changes coming Aug 2012 to the Thai government's insurance protection on bank deposits (new 1 million baht per bank per person limit).

http://www.thailawforum.com/thai-deposit-insurance-law.html

Here's an excerpt:

The concern is going forward from 11 August 2012, just a little over a year away, when only 1 million baht will be covered by government protection. The implications of this change are significant, especially when one looks at how the coverage will apply. Multiple branches of the same bank will count as one deposit and will be lumped together. Though married couples will receive protection on a per person and per account basis of up to 1 million, separately, in the event of their owning a joint account, protection will not be separated out for that account. In most cases, the money will be split and counted against the individual account of each spouse. This means that management of funds across varied institutions may become a need for many depositors.

Here's the link to the Thai Govt. Deposit Protection Agency which runs the govt insurance program. They used to have English pages of some of their key info, but those seem gone now... This is a Thai page, but it has a chart midway down the page with the numbers on the insured deposit amounts and the effective dates of the changes.

http://www.dpa.or.th/ewt_news.php?nid=363

BTW, I haven't heard of any Thai banks doing anything to provide private insurance for deposits above 1 million baht per bank per depositor... But since the change isn't coming until Aug. 2012, it will be interesting to see whether competition spurs any of them to do that as a marketing point.

BTW, I believe the changes to the govt deposit insurance program are part of a 2008 law passed by the Thai government.... not a policy decision by the Bank of Thailand.

[ludditeman]

Look at the quality of the banks services not just rates. Bangkok Bank, Kasikorn, SCB, Bank of Ayudhaya are the better banks generally. TMB is OK but behind the others generally in services, technology etc

I would say TMB is in the forefront of new technology and services.

SMS on every withdrawal, from any ATM with no ATM charge (before my card comes out the machine) beats everyone else.

What banks service is higher tech than that?

[TallGuyJohninBKK]

I also bring much of my funds in annually in cash. The rate is far better exch on a day of my choosing. I don't get hit with transf fees either. It is a bit of a hassle but to me, it's worth the US150.

This also answers Sirone's question above.

Re bringing money from the U.S. to Thailand, I think most people believe that the most economical way of doing so is using the BKKB service that allows a U.S. person to do a free ACH from their U.S. bank account to BKKB's New York branch (using BKKB NY's ABA/routing number and the account number for your BKKB branch account in Thailand). The NY branch then automatically forwards the funds on to your BKKB Thailand account. Usually takes a couple days...

The maximum fees involved are small: no more than $20 U.S. handling fee by the NY branch no matter how much you send, plus 0.25% commission by BKKB in Thailand, but that's capped at a minimum of 200 and maximum of 500 baht. So the most anyone could pay using that method in fees would be about $37, even sending some huge amount.

BTW, the exchange rate BKKB uses for such transfers is its daily "buying TT" rate, which is OK...but usually a bit lower than what a no-fee ATM transaction such as using AEON would produce. BKKB's exchange rates usually seem to be in about the middle of the pack re other Thai banks..not the highest, not the lowest.

The first link below describes the BKKB process. The second link is their list of fees, depending on the amount sent.

http://www.bangkokba...from%20USA.aspx

http://www.bangkokba...0USA%20Fee.aspx

Edited November 27, 2011 by TallGuyJohninBKK

[Mike45]

BTW For the 60 or so US banks that have gone bankrupt this year, it's not just the monetary amount guarantee, but the time and hassle involved as well.

I can tell you a little about my experience with a failed US bank.

It was back when the max gaurantee was 100,000. I looked at my account online on Saturday morning when I update through Quicken. IndyMac. Bank would not update so I went to their web site. It said that it had been taken over by the FDIC and on Monday would reopen for business. It did reopen on Monday called IndyMac Federal bank and I had full access. I never had to worry about the 80,000 I had in the bank. I never have to worry about FRAUD from an employee.

Fraud from an employee is one of my bigger concerns in Thailand. Not because it happens more often but because I don't have an absolute protection from it.

[hyperdimension]

And with the TMB 'no fixed' you can only take money out in person at the counter with bank book and passport in hand.

No cards, so chance of theft or fraud very small. And all TMB transactions give an SMS alert to your mobile instantly.

When I use my normal TMB current account (ATM card but no interest) the SMS arrives before the card is out of the machine showing withdrawal amount and remaining bank balance.

Also the TMB current account ATM card gives free withdrawals at all bank machines (cos they don't have many of their own ATMs)

Is it possible to transfer funds between the "no-fixed" account and the "normal TMB current account (ATM card but no interest)" via internet banking?

Is interest in the "no-fixed" account calculated nightly, and paid monthly?

Edited November 27, 2011 by hyperdimension

[TallGuyJohninBKK]

Fraud from an employee is one of my bigger concerns in Thailand. Not because it happens more often but because I don't have an absolute protection from it.

Yes.. Apart from the coming lower limit on deposit insurance for Thai bank accounts, this is another concern. I likewise don't want folks here to think I'm saying there's a greater level of internal bank fraud in Thailand compared to other places. I have no facts to allow that kind of comparison.

But what I do know, factually and experientially from living here, is that Thailand doesn't have the same kind of "rule of law" as you might find in western countries. What I mean by that is, specifically, a largely ineffectual police/law enforcement function, little in the way of government consumer protection laws and regulations for banking, and a civil courts system that's basically of little/no use for most farangs.

Put those three factors together, and the result is you have a banking environment where a farang pretty much can expect little or no protection/recourse if something goes bad with your local banking -- apart from the bank going bankrupt and your deposit being covered by the government's insurance plan.

It comes down to a risk/rewards and risk tolerance proposition. Are you prepared and capable of accepting the added risks in exchange for a somewhat better rate of return on your funds (compared to typical western alternatives at present).

I must say, my eyes opened wide some time back when I was reading about a case in Thailand where a bank employee had absconded with some customers' funds...

And the bank's response in the news report was that the bank wasn't responsible for the customers' lost deposits, because it was a criminal case and not an action of the bank. So the bank was telling the Thai victims that they needed to deal with Thai police on the issue.

Edited November 27, 2011 by TallGuyJohninBKK

[fletchsmile]

Look at the quality of the banks services not just rates. Bangkok Bank, Kasikorn, SCB, Bank of Ayudhaya are the better banks generally. TMB is OK but behind the others generally in services, technology etc

I would say TMB is in the forefront of new technology and services.

SMS on every withdrawal, from any ATM with no ATM charge (before my card comes out the machine) beats everyone else.

What banks service is higher tech than that?

Several banks do that now as far as I'm aware. Ours also do SMS with credit card purchases in addition to above mentioned. TMB are picking up speed but are still behind the others. TMB have struggled for quite some time because of internal politics, shareholders and clashes of cultures, with the foreign stakeholders often having differences with the local Thai ones. One example TMB still give passbooks for mutual fund purchases and have a somewhat manual process At Bangkok Bank you can buy mutual funds via ATMs. When you have time check out functionality on one of the newer Bangkok Bank ATMs for example vs TMB.

[TallGuyJohninBKK]

I know BKKB, but I've never dealt with TMB, so I wouldn't take sides on that subject..

But I will note, I believe that member Lomatopo reported here the other day that he couldn't get the BKKB SMS notification system to work for cash ATM withdrawals... and that it only worked for purchases and other transactions.

Likewise, the BKKB system only allows one to set the lowest level for maximum daily ATM withdrawals at 50,000 baht, whereas some of us would prefer to have a lower choice for that kind of limit.

Of course, there are all kinds of details in any banking relationship. I personally like BKKB's general online banking setup for clarity and ease of use, and find their online bill pay function to be comprehensive, clear and easy to use. And of course their economical electronic funds transfer systems for moving money from the UK or U.S. to Thailand are among the best vehicles for that.

Then further, based on a lot of comments here thru the years, BKKB doesn't usually rate as among the most cooperative/helpful Thai banks for farangs who want to open their first new account here, whereas Kasikorn Bank usually gets pretty high marks from TV members who comment on such experiences.

BKKB does now has a very clear and well organized web page that details exactly what farang need to have, depending on their visa or similar status, in order to obtain/access different banking services. Yet the customer experience in the branches doesn't always seem to match that clarity.

[bangkokburning]

John - I hope you did not take my post as criticism or incomprehension. Thoroughly agree and dumbfounded as to why insurance has been cut back be it public or private.

I understand why those in NY or with more complex needs might go with BKKBK. I am neither. I have my brokerage, my local retail and my SCB acct here. Works for me. I like all the ATMS in BKK but dislike the lack of them down south. Oh well.

Personally, I do not trust Thai banks and I never will. I do not trust anything about them. I would have my money in Singapore or Malaysia before Thailand. Not to mention the 15% witholding, all the transf hassles, etc...

I get daily SMS bals (+ w/d's) from SCB for B10 per mo. Works fine. I like SCB well enough, I can use my ATM on the Air Asia site :-))

Doing it all over maybe I would go with K bank, it's had a real boom in growth.

Anyway - maybe we can get back on topic. Best straight up bank rate on savings and/or term deposits. My gf seems to think its the GSB.

Edited November 28, 2011 by bangkokburning

[TallGuyJohninBKK]

Thanks for the post... No problem here!

[fletchsmile]

So according to John. In a time of unparallelled international banking instability the BOT has decided that it will insure banks less, not more AND appears banks are not stepping up to cover the potential loss with private insurance (?). And mind you - 1m is only 200k more than your money on hold for retirement. It's peanuts.

Personally, maybe it was 1997 but the whole Thai Govt/Banking monopoly/1997 still gives me long pause. Thailand will never see 800k of my money sitting in her banks.

Firstly you need to bear in mind the "unparalleled international banking instability" is mainly a western phenomenon. Thai banks like most Asian banks are generally in very good shape. Their capital adequacy ratios (CAR) ratios are generally superior to US, UK and western banks. In terms of liquidity they are also better funded and score higher on most liquidity measures, eg ADR ratios, and under the Thai banking models, most Thai banks are not reliant on wholesale funding.

Secondly one of the reasons Thai banks are in such good shape is that ironically they learnt from 1997, and put in many safeguards that simply don't exist in the west.

Don't forget that until the likes of Ireland and Iceland Uk protection was under about THB 2mio equivalent, as were many European banks. they had to put it up because the countries messed up. Thailand has done very well, so is reducing.

The depositor protection reductions should actually have come in earlier. However, Thai authorities took the decision to defer them, at the times of the 2008 crises etc. What they have found is the Thai banking sector as performed very well compared to UK, US and European banks, so are now comfortable reducing them as originally planned before the western financial sector messed up.

It's worth noting that when US, UK banks etc were refusing to lend to each other, when Libor spreads were rocketing, and institutions such as Northern Rock (overly reliant on wholesale funding unlike Thai banks), the Thai banks came thru relatively well.

One of the complaints foreigners often make about the Thai banking sector is that there is little competition, differentiation etc. The removal of 100% protection will lead to greater interest rate differentials between banks, giving wider choice and hopefully better savings rates. At present with all banks guaranteed there is less need for weaker banks to offer better rates and attract money, as credit ratings don't come in to it.

Reduction in government guarantees is one of several steps the Thais are taking to free up the market. There are many others under Financial Sector Master Plan 2. eg HSBC will be allowed more branches to allow more foreign competition. As a relatively safer bank they will offer lower rates, but banks with lower credit standing will need to offer more. At the end of the day people who continually post these threads on best rates will see more competition in future

[fletchsmile]

...But since the change isn't coming until Aug. 2012, it will be interesting to see whether competition spurs any of them to do that as a marketing point.

That's already started John. UOB and Stan Chart which have the best credit ratings of locally incorporated banks often highlight their credit ratings as being the best in Thailand in some of their ads. As you say, it will feature more and more in future.

[TallGuyJohninBKK]

Fletch, I wasn't referring to any discussion or marketing of individual banks' credit ratings...

I was wondering whether, once the Thai govt. deposit insurance limit drops to 1 million next year, whether any of the Thai banks will take on private deposit insurance to cover larger amounts, and use that as a marketing angle to their (wealthier) customers.

There are some places in the U.S. where banks pay for extra deposit insurance separate from the FDIC government limits. And some credit unions actually opt out of the FDIC insurance program and are only privately insured, and they must disclose that as well.

Someone here earlier in this thread had wondered whether Thai banks might also go down that road.

I've not seen any indication of that. But as mentioned, we're still almost a year away from the change.

...But since the change isn't coming until Aug. 2012, it will be interesting to see whether competition spurs any of them to do that as a marketing point.

That's already started John. UOB and Stan Chart which have the best credit ratings of locally incorporated banks often highlight their credit ratings as being the best in Thailand in some of their ads. As you say, it will feature more and more in future.

[fletchsmile]

Fletch, I wasn't referring to any discussion or marketing of individual banks' credit ratings...

I was wondering whether, once the Thai govt. deposit insurance limit drops to 1 million next year, whether any of the Thai banks will take on private deposit insurance to cover larger amounts, and use that as a marketing angle to their (wealthier) customers.

There are some places in the U.S. where banks pay for extra deposit insurance separate from the FDIC government limits. And some credit unions actually opt out of the FDIC insurance program and are only privately insured, and they must disclose that as well.

Someone here earlier in this thread had wondered whether Thai banks might also go down that road.

I've not seen any indication of that. But as mentioned, we're still almost a year away from the change.

Possible John, but I don't see it happening any time soon. As you say a year or so away at least. It would also require providers of the insurance to enter the market . You then have to look into who the counterparty is that provides the insurance. In a Thai context, the banks probably have among the strongest credit ratings of any company in the country. A local credit insurance provider wouldn't have a credit rating above Thailand's sovereign credit rating, so is not much above the banks anyway. Now if you go to the global market for a provider, then you're just linking yourself into the global systematic risks of the global finance sector.

The flip side is I would feel worried about banks that felt the need to buy this type of insurance. It raises the question of are they so weak they need to buy it? and if they were adequately capitalised and run as they should be, it shouldn't be necessary.

Wealthy Thai investors / HNWI's generally don't have their money all tied up in cash in Thailand. They're in other sectors as well in Thailand as well as overseas (both officially and unofficially)

One also has to remember and think about to what extent the government has the resources and desire to step in. eg in the UK, the government stepped in and took large shares in the failing UK banks so all depositors were protected. One might argue the Thailand Govt is better placed than the UK government to do that, should they decide to do so, given the healthier economy, reserves etc and that Thai banks are smaller in size

They are also pretty shrewd in finding buyers for the banks if they want to, and the demand from foreign banks to acquire a Thai bank far outweighs the supply. eg Bank Thai was weak. Result: they opened it up for sale. Several banks were interested and CIMB bought it out. Thai banks in general are simpler in terms of products and more transparent to see what is going on in their balance sheet compared to some of the big name US banks like Cit, Morgan Stanley where even the regulator has no clue what they're really up to. Use of fancy leveraged products is much less common, and again regulation often restricts it.

[TallGuyJohninBKK]

Well Fletch, if you're correct, then farangs in Thailand, such as retirees, will need to be much more careful about how they handle their Thai bank deposits starting next year -- unless they want to take the very ill-advised route of holding bank deposits in excess of government insured limits.

I suspect, the change in Thai government insurance amounts on bank deposits is a subject that most farangs in Thailand probably are blissfully unaware of -- despite the attention the subject is getting in our threads here. But that's just a very very very narrow slice of the community in country.

BTW, you posted on something above that I'm unaware of... Can you elaborate on this info below:

There are many others under Financial Sector Master Plan 2. eg HSBC will be allowed more branches to allow more foreign competition. As a relatively safer bank they will offer lower rates, but banks with lower credit standing will need to offer more.

Right now all the foreign banks in country are limited, I believe, to only one regular branch... Hence HSBC's sole Silom HQ location, and similar for CitiBank and Chase...

I haven't heard of any concrete plan/timeframe for the Bank of Thailand to change its regulations on that... Do you know something in that regard?

BTW, last I heard, HSBC had all kinds of sovereign debt liability exposure, was withdrawing from some parts of the U.S. market, and I even saw their chief exec recently speculating that they might decide to pull their corporate headquarters out of London because of some pending regulatory changes there. They are a "relatively safer" bank compared to whom?

[fletchsmile]

Well Fletch, if you're correct, then farangs in Thailand, such as retirees, will need to be much more careful about how they handle their Thai bank deposits starting next year -- unless they want to take the very ill-advised route of holding bank deposits in excess of government insured limits.

I suspect, the change in Thai government insurance amounts on bank deposits is a subject that most farangs in Thailand probably are blissfully unaware of -- despite the attention the subject is getting in our threads here. But that's just a very very very narrow slice of the community in country.

BTW, you posted on something above that I'm unaware of... Can you elaborate on this info below:

There are many others under Financial Sector Master Plan 2. eg HSBC will be allowed more branches to allow more foreign competition. As a relatively safer bank they will offer lower rates, but banks with lower credit standing will need to offer more.

Right now all the foreign banks in country are limited, I believe, to only one regular branch... Hence HSBC's sole Silom HQ location, and similar for CitiBank and Chase...

I haven't heard of any concrete plan/timeframe for the Bank of Thailand to change its regulations on that... Do you know something in that regard?

BTW, last I heard, HSBC had all kinds of sovereign debt liability exposure, was withdrawing from some parts of the U.S. market, and I even saw their chief exec recently speculating that they might decide to pull their corporate headquarters out of London because of some pending regulatory changes there. They are a "relatively safer" bank compared to whom?

For FSMP2 you can google it, but 2 official docs are on MoF and BOT sites:

http://www.bot.or.th/English/FinancialInstitutions/Highlights/FSMP2/Documents/FSMPII_EexecutiveSummaryE.pdf

http://www2.mof.go.th/press_releases_detail.php?id=22

For HSBC yes they have struggled in the US, but if one doesn't over focus on US banking they are in good shape. eg Strong in Asia. Shifting the headquarters would be no big deal. Hong Kong's regulator is a tough cookie and thorough - HKMA. this would be more for tax and business reasons and not impact stability. If anything with the mess the UK and US regulators have made HKMA may add more confidence. One of the safest global banks

HSBC now have a branch in Thong Lor Sukhumvit 55, and have plans for more. UOB and Stan Chart have local status so enjoy somewhat of a hybrid and have several branches, mainly in BKK.

I'm not sure why the above is cause for concern. Thai banks are generally in good shape.

Q: When was the last time you saw a Thai bank collapse compared to US? We are in a very different world to 1997 now. It would be a nightmare dealing with a collapsed foreign bank while based in Thailand. For someone living in Thailand, I'd take the best Thai banks over any US bank at the moment. Citi got mauled badly in recent years and is worth a fraction of before - close call. MS is always linked to various global risks eg CDS and Europe exposure, JPM gambles away. For the smaller banks dozens seem to go bust every year.

I think the fear for the US expats is they don't have much first hand knowledge of behind the scenes in Thailand, plus language ability limits them reading key texts, and knowing where to go for info. Swap it over and imagine a Thai looking at US banking. Lehmans, Bear Stearns, Citi, dozens of failures each year. They'd be very worried. How do they sift thru that? What about systemic risk in Thailand compared to US? Count the too big to fail banks there vs here. Also that government guarantee looks nice on paper, but given the health of the US government, how long vefore they reduce and withdraw, and can you guarantee they'll even be able to pay if a couple more big banks role over and the system comes down...

Edited November 28, 2011 by fletchsmile

[Naam]

Thai banks are generally in good shape.

in fact much better than any of the big multinational freaking banks run by notorious banksters. but that does not impress the Farang "anything Thai bashing Brigade" which possesses a wealth of no bloody idea concerning any banks' risk exposures.

now putting on my flak jacket and waiting patiently for "incoming"