Banking
From The Report: Thailand 2012
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Thailand’s banking sector is well capitalised and highly conservative, a legacy of the 1997-98 Asian financial crisis, which left financiers in the region averse to systemic risk. It is also a very local affair, with less than 15% of assets held by foreign banks. This may change in 2015 when new banking regulations come into force, but little shakeup is expected for the time being. The banking sector is also expecting an impact from new caps on deposit insurance, which are being implemented by the Bank of Thailand in the hopes of pushing commercial clients toward the capital markets.

This section has interviews with Prasarn Trairatvorakul, Governor, Bank of Thailand; Chartsiri Sophonpanich, President, Bangkok Bank; and Matthew Lobner, CEO, HSBC Thailand.

Articles from this Chapter

Overview

Bouncing back: Despite the aftermath of the floods, the sector is posting solid numbers
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In many ways Thailand’s banking sector looks much like those of its neighbours: tightly regulated, well capitalised and highly risk-averse. Just as in other countries in the region, including Malaysia and Indonesia, the 1997-98 Asian financial crisis had a formative effect on bankers. Risk management has improved since the crisis, and central bankers are focused on system-wide stability. But banking in Thailand is also a notably Thai affair. Just 14.5% of assets are held by foreign banks.…

Analysis

Fair play: Commercial and socially oriented banks spar over territory
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Alongside commercial banks Thailand has licensed a range of state-owned financial companies with mandates that go beyond banking profits, incorporating social benefits and national development goals. Tensions between this group of eight specialist lenders and commercial banks increased in 2011. Not all of Thailand’s state-owned lenders are in the crosshairs. The government is the largest shareholder in Krung Thai Bank, the country’s second-largest lender by assets. However, Krung Thai…

Interview

OBG talks to Prasarn Trairatvorakul, Governor, Bank of Thailand
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Interview: Prasarn Trairatvorakul What do you see as the appropriate balance to strike between controlling inflationary pressure and supporting economic growth? PRASARN TRAIRATVORAKUL: Our strategy aims to preserve such a balance in a healthy manner. The Thai economy recovered well from the 2008 crisis, particularly after 2009, indicating its resilience. Since then, we have seen upward pressure on prices from the domestic economy, both on the supply side and in inflation expectations from businesses…

Interview

OBG talks to Chartsiri Sophonpanich, President, Bangkok Bank, and Chairman, Thai Bankers’ Association
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Interview: Chartsiri Sophonpanich What impact, direct and indirect, did the floods in late 2011 have on the Thai banking system? CHARTSIRI SOPHONPANICH: The economy weakened in the fourth quarter of 2011 due to the flooding, with GDP falling by 9% year-on-year. Thailand’s full-year growth rate was around 0.1%, well below the original forecast of 4-5%. With many factories being shut down, the industrial production index fell by 47% in November. The direct impact on the banking sector included…

Analysis

High five: A look at the largest players
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Thailand’s roster of banks and financial services companies include the universal banking model, but even among larger lenders differentiation by specialty and focus is pronounced. Among that roster, the following five stand out as the largest and most closely watched: BANGKOK BANK: Thailand’s largest lender by assets has about 1000 branches, but also focuses on corporate clients through loans and products such as cash management and custodian services. It was the first Thai bank to open…

Interview

OBG talks Matthew Lobner, CEO, HSBC Thailand, and Chairman, Association of International Banks (AIB)
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Interview: Matthew Lobner What have been the direct and indirect impacts of the late-2011 floods on the Thai banking system? MATTHEW LOBNER: The 2011 floods wreaked havoc on three areas of business: manufacturing, suppliers and infrastructure. Despite the setbacks, corporations did a good job in collaborating to address the challenges. Huge efforts are being made to recover from the losses, and we will see productivity ramp up as replacement machinery arrives. Still, it will take time to order,…