Moody’s assigns credit negative to SCB and KTB

[Lite Beer]

Moody’s assigns credit negative to SCB and KTB

BANGKOK: -- Moody’s Investors Service says that proposed loan restructuring by Siam Commercial Bank and Krung Thai Bank for Sahaviriya Steel Industries is credit negative to the two banks.

Additional provisions on SSI exposure will hurt the banks’ profitability and ability to generate capital internally this year, said Simon Chen, Moody’s vice president and senior analyst.

SCB and KTB together account for 45 billion baht in loans to be restructured.

“We estimate that the capital ratios of KTB and SCB which would likely have risen this year with retained earnings despite the slow Thai economy and increasing asset risks, will instead remain roughly flat because of their additional provisions for SSI exposure,” said Mr Chen.

The proposed restructuring involves three creditors and amounts to 50 billion baht in debt. It relates to a decision by SSI to halt production at the former Corus steelworks in Teesside, the United Kingdom.

Source: http://englishnews.thaipbs.or.th/moodys-assigns-credit-negative-to-scb-and-ktb

-- Thai PBS 2015-09-27

[inzman]

How could these banks have approved these loans to a company that has had previous bankruptcies? Is there no checks and balances, these are privately owned banks. This is a sham on the stockholders equity .

[Chivas]

Out of interest do these Banks protect Deposits to a certain limit ?? (Or the Government)

Edited September 27, 2015 by Chivas

[Orac]

How could these banks have approved these loans to a company that has had previous bankruptcies? Is there no checks and balances, these are privately owned banks. This is a sham on the stockholders equity .

KTB is state owned with 55% of shares held by the Financial Institution Development Fund.

SCB is private however 21.3% of the shares are directly held by a certain VIP.

[clockman]

This is Thailand, no transparency, no accountability!

[NCC1701A]

Is SCB the bank that one of the universities money disappeared in? like all of it?

[topt]

See here for actions taken to help fund the "hole"

http://uk.reuters.com/article/2015/09/24/siam-commercial-bank-siam-cement-debt-idUKL4N11U32T20150924

Looks like a nice cosy club

[noitom]

Thai banks entering the poop chute.

[Baerboxer]

See here for actions taken to help fund the "hole"

http://uk.reuters.com/article/2015/09/24/siam-commercial-bank-siam-cement-debt-idUKL4N11U32T20150924

Looks like a nice cosy club

Interesting - than you for posting the link.

If I remember correctly, wasn't Thaksin suggesting he be made head of the Crown Property Bureau when he came back had his Amnesty Bill been successful?

Now, just imagine that!

Edited September 28, 2015 by Baerboxer

[Si Thea01]

How could these banks have approved these loans to a company that has had previous bankruptcies? Is there no checks and balances, these are privately owned banks. This is a sham on the stockholders equity .

KTB is not privately owned, it was the largest state enterprise that was floated on the Thai stock exchange in 1989. Still has state involvement. The SCB is also a public company listed on the stock exchange. Again, not privately owned.

You should know by now that Banks leave a lot to be desired, rip off the small fry, bend over backwards for the big end of town. This happens world wide. Banks and other large financial institutions caused the GFC in 2008 and we're all still paying for it.

[elgordo38]

How could these banks have approved these loans to a company that has had previous bankruptcies? Is there no checks and balances, these are privately owned banks. This is a sham on the stockholders equity .

KTB is not privately owned, it was the largest state enterprise that was floated on the Thai stock exchange in 1989. Still has state involvement. The SCB is also a public company listed on the stock exchange. Again, not privately owned.

You should know by now that Banks leave a lot to be desired, rip off the small fry, bend over backwards for the big end of town. This happens world wide. Banks and other large financial institutions caused the GFC in 2008 and we're all still paying for it.

I agree with what you say but boy stupidity pills were the order of the day on this one to lend this company more money. There should be an investigation definitely to see whose name is on the loan authorization and charges laid. This goes back to an earlier comment I made about illegal shennanigans all over the planet on a massive scale.

[Si Thea01]

How could these banks have approved these loans to a company that has had previous bankruptcies? Is there no checks and balances, these are privately owned banks. This is a sham on the stockholders equity .

KTB is not privately owned, it was the largest state enterprise that was floated on the Thai stock exchange in 1989. Still has state involvement. The SCB is also a public company listed on the stock exchange. Again, not privately owned.

You should know by now that Banks leave a lot to be desired, rip off the small fry, bend over backwards for the big end of town. This happens world wide. Banks and other large financial institutions caused the GFC in 2008 and we're all still paying for it.

I agree with what you say but boy stupidity pills were the order of the day on this one to lend this company more money. There should be an investigation definitely to see whose name is on the loan authorization and charges laid. This goes back to an earlier comment I made about illegal shennanigans all over the planet on a massive scale.

With you all the way.

[Asiantravel]

so what is the consensus regarding the stability of these two banks compared to the situation pre-1997?

Are they in worse shape today than they were then or despite this silly move on their part are they still more stable today?

[MyFriend You]

I have never been the Chicken Little "The Sky is Falling" kind of person, but I have a modest sum in the SCB, not small nor large - with this and past rvelations, should I be looking for a new bank?? I'd hate for my 'honey pot' to just disappear one day.

[Orac]

I have never been the Chicken Little "The Sky is Falling" kind of person, but I have a modest sum in the SCB, not small nor large - with this and past rvelations, should I be looking for a new bank?? I'd hate for my 'honey pot' to just disappear one day.

In short no, though if you are uneasy it may give you some peace of mind to split you money between more than one bank.

SCB is well able to handle these current problems with an increase in provisions for non-performing loans. It will effect bank profits/earnings which were previously forecast at over 60bn baht for the year but should have no effect on depositors.

[Asiantravel]

I have never been the Chicken Little "The Sky is Falling" kind of person, but I have a modest sum in the SCB, not small nor large - with this and past rvelations, should I be looking for a new bank?? I'd hate for my 'honey pot' to just disappear one day.

In short no, though if you are uneasy it may give you some peace of mind to split you money between more than one bank.

SCB is well able to handle these current problems with an increase in provisions for non-performing loans. It will effect bank profits/earnings which were previously forecast at over 60bn baht for the year but should have no effect on depositors.

but if in the end you are wrong you will bail us out okay?

[Orac]

I have never been the Chicken Little "The Sky is Falling" kind of person, but I have a modest sum in the SCB, not small nor large - with this and past rvelations, should I be looking for a new bank?? I'd hate for my 'honey pot' to just disappear one day.

In short no, though if you are uneasy it may give you some peace of mind to split you money between more than one bank.

SCB is well able to handle these current problems with an increase in provisions for non-performing loans. It will effect bank profits/earnings which were previously forecast at over 60bn baht for the year but should have no effect on depositors.

but if in the end you are wrong you will bail us out okay?

A highly unlikely scenario but the conditions that would need to prevail for a deposit to be lost do not bear thinking about as it would probably be part of a systemic collapse of Thailand as a whole so having your money in any Thai bank would be just as risky.

[coulson]

Out of interest do these Banks protect Deposits to a certain limit ?? (Or the Government)

only up to 1 million baht

[Orac]

Out of interest do these Banks protect Deposits to a certain limit ?? (Or the Government)

only up to 1 million baht

I thought it was 25m baht now, recently reduced from 50m. Edited September 30, 2015 by Orac

[coulson]

Out of interest do these Banks protect Deposits to a certain limit ?? (Or the Government)

only up to 1 million baht

I thought it was 25m baht now, recently reduced from 50m.

Thailand was fully guaranteed until 10 August 2011. From 11 August 2011 until 10 August 2012, the coverage dropped to 50 million baht per depositor per bank. Since then coverage has been limited to THB one million per depositor per bank.

Source. Wikipedia

[Orac]

Out of interest do these Banks protect Deposits to a certain limit ?? (Or the Government)

only up to 1 million baht

I thought it was 25m baht now, recently reduced from 50m.

Thailand was fully guaranteed until 10 August 2011. From 11 August 2011 until 10 August 2012, the coverage dropped to 50 million baht per depositor per bank. Since then coverage has been limited to THB one million per depositor per bank.

Source. Wikipedia

It was extended to 11th Aug 2015 when it was dropped to 25m which runs out 10th Aug 2016 at present.

Edit - found a link (DPA website only seems to work in Thai)

http://www.nationmultimedia.com/opinion/Towards-a-world-of-universal-banking-30266303.html

Edited September 30, 2015 by Orac

[NCC1701A]

Out of interest do these Banks protect Deposits to a certain limit ?? (Or the Government)

only up to 1 million baht

I thought it was 25m baht now, recently reduced from 50m.

Thailand was fully guaranteed until 10 August 2011. From 11 August 2011 until 10 August 2012, the coverage dropped to 50 million baht per depositor per bank. Since then coverage has been limited to THB one million per depositor per bank.

Source. Wikipedia

This tells you all you need to know about the Thai economy and the BOT cash reserves. From 100% to about the cost of a pick up truck.

[Chivas]

Out of interest do these Banks protect Deposits to a certain limit ?? (Or the Government)

only up to 1 million baht

Thanks for that. 1 million more than enough for me. Cant imagine too many foreigners would keep more than that in a Thai Bank. I can only imagine the conversations, letters, meetings to even start to recover money through any Government scheme. You can imagine for starters "right Mr Customer do you have the correct visa to hold that deposit" 30 Day or Tourist Sorry should have read fine print !!

[Pib]

http://www.dpa.or.th/ewt_news.php?nid=320&filename=index___EN

[fletchsmile]

only up to 1 million baht

I thought it was 25m baht now, recently reduced from 50m.

Thailand was fully guaranteed until 10 August 2011. From 11 August 2011 until 10 August 2012, the coverage dropped to 50 million baht per depositor per bank. Since then coverage has been limited to THB one million per depositor per bank.

Source. Wikipedia

This tells you all you need to know about the Thai economy and the BOT cash reserves. From 100% to about the cost of a pick up truck.

Depends how you look at it...

Let's not forget US and European banks had to go from the cost of a pick up truck to blanket "do what is needed at all costs" during the GFC

So one could argue US / European / western institutions were up sh*t creek so had little choice but to increase protection to shore up confidence to prevent a complete collapse of their banking systems. On the other hand Thai banking sector didn't have such problems so was moving towards market driven forces and less of a nanny state

The decreases in Thai DPA were actually scheduled to happen earlier in Thailand. But, because of the hamburger crisis and the mess the west was in they were maintained the levels for longer as BOT deemed it inappropriate to reduce protection while western economies and banks were in dire shape maintaining western protection at levels higher than they'd ever needed to be historically.

Thailand's foreign reserves are also in healthy shape compared to the US which has to print and heavily borrow

Singapore's equivalent DPA threshold (SGD 50k) is currently lower than Thailand (THB 25 mn), and even from 2016 IF the decrease goes ahead in Thailand in 2016 to THB 1mn, Singapore would be only marginally above Thailand. Worth noting that Singapore has a AAA credit rating unlike US,UK, and most of Europe using EUR, and pickups are expensive in Singapore

So there's more than one way of looking at it....

Cheers

Fletch

Edited October 1, 2015 by fletchsmile

[coulson]

only up to 1 million baht

I thought it was 25m baht now, recently reduced from 50m.

Thailand was fully guaranteed until 10 August 2011. From 11 August 2011 until 10 August 2012, the coverage dropped to 50 million baht per depositor per bank. Since then coverage has been limited to THB one million per depositor per bank.

Source. Wikipedia

This tells you all you need to know about the Thai economy and the BOT cash reserves. From 100% to about the cost of a pick up truck.

Depends how you look at it...

Let's not forget US and European banks had to go from the cost of a pick up truck to blanket "do what is needed at all costs" during the GFC

So one could argue US / European / western institutions were up sh*t creek so had little choice but to increase protection to shore up confidence to prevent a complete collapse of their banking systems. On the other hand Thai banking sector didn't have such problems so was moving towards market driven forces and less of a nanny state LOL

The decreases in Thai DPA were actually scheduled to happen earlier in Thailand. But, because of the hamburger crisis and the mess the west was in they were maintained the levels for longer as BOT deemed it inappropriate to reduce protection while western economies and banks were in dire shape maintaining protection at levels higher than they'd ever needed to be historically.

Thailand's foreign reserves are also in healthy shape compared to the US which has to print and heavily borrow

Singapore's equivalent DPA threshold (SGD 50k) is currently lower than Thailand (THB 25 mn), and even from 2016 IF the decrease goes ahead in Thailand in 2016 to THB 1mn, Singapore would be only marginally above Thailand. Worth noting that Singapore has a AAA credit rating unlike US,UK, and most of Europe using EUR, and pickups are expensive in Singapore LOL

So there's more than one way of looking at it....

Cheers

Fletch

Apologies......one should never trust wiki. So it is 25 million!!!!

Pickups are indeed expensive in sg.....putting them on the road is another story also.

[elgordo38]

only up to 1 million baht

I thought it was 25m baht now, recently reduced from 50m.

Thailand was fully guaranteed until 10 August 2011. From 11 August 2011 until 10 August 2012, the coverage dropped to 50 million baht per depositor per bank. Since then coverage has been limited to THB one million per depositor per bank.

Source. Wikipedia

This tells you all you need to know about the Thai economy and the BOT cash reserves. From 100% to about the cost of a pick up truck.

Depends how you look at it...

Let's not forget US and European banks had to go from the cost of a pick up truck to blanket "do what is needed at all costs" during the GFC

So one could argue US / European / western institutions were up sh*t creek so had little choice but to increase protection to shore up confidence to prevent a complete collapse of their banking systems. On the other hand Thai banking sector didn't have such problems so was moving towards market driven forces and less of a nanny state LOL

The decreases in Thai DPA were actually scheduled to happen earlier in Thailand. But, because of the hamburger crisis and the mess the west was in they were maintained the levels for longer as BOT deemed it inappropriate to reduce protection while western economies and banks were in dire shape maintaining protection at levels higher than they'd ever needed to be historically.

Thailand's foreign reserves are also in healthy shape compared to the US which has to print and heavily borrow

Singapore's equivalent DPA threshold (SGD 50k) is currently lower than Thailand (THB 25 mn), and even from 2016 IF the decrease goes ahead in Thailand in 2016 to THB 1mn, Singapore would be only marginally above Thailand. Worth noting that Singapore has a AAA credit rating unlike US,UK, and most of Europe using EUR, and pickups are expensive in Singapore LOL

So there's more than one way of looking at it....

Cheers

Fletch

Apologies......one should never trust wiki. So it is 25 million!!!!

Pickups are indeed expensive in sg.....putting them on the road is another story also.

Another reason I would not own a vehicle here plus iffy insurance coverage and the hassle of getting a drivers license and throw in the road rage here no thanks.

[fletchsmile]

Another reason I would not own a vehicle here plus iffy insurance coverage and the hassle of getting a drivers license and throw in the road rage here no thanks.

Isn't driving one of the things wives are for? comes under "etc" I believe?

Edited October 1, 2015 by fletchsmile

[topt]

Another reason I would not own a vehicle here plus iffy insurance coverage and the hassle of getting a drivers license and throw in the road rage here no thanks.

Isn't driving one of the things wives are for? comes under "etc" I believe?

I wonder if elgordo38 has ever tried to get a license? That statement and "iffy insurance" are about as far removed from the truth as I and many others have experienced

[Pib]

Another reason I would not own a vehicle here plus iffy insurance coverage and the hassle of getting a drivers license and throw in the road rage here no thanks.

Isn't driving one of the things wives are for? comes under "etc" I believe?

No sir...I'm the chauffeur for my wife...I must maintain a valid drivers license and insurance at all time...otherwise I may not receive favors from the wife. When it comes to road rage I don't blow my horn and cut people off nearly as much as I use to.