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Thailand Commercial Banking Report Q3 2008Published by: Business Monitor International Published: Sep. 17, 2008 - 38 Pages Table of Contents
AbstractOver the last year, the crisis in the inter-bank market, and the soaring prices of oil and other raw materials,tended to obscure several other important trends. In most of the developing world (i.e. the vast majority ofthe countries whose banking industries are surveyed by BMI), lending has been growing quickly. In manyemerging markets, inflationary pressures have been boosted by a rapid increase in credit. In a number ofemerging markets, macro-economic imbalances are evident.The figures on the tables above provide a snapshot of the banking sector in Thailand and the changes thathave taken place within it over the last year. To place the figures in context, it may be useful to bear inmind certain aspects of the 59 countries whose banking sectors are currently surveyed by BMI. Acrossthis sample, the median growth in assets in local currency terms was 21.3% (in Colombia). The medianloan growth was 21.6% (in India). The median growth in deposits was 17.9% (in Brazil). On their own, the ratios of loans to deposits, assets, and GDP mean little: however, they can provideuseful hints when combined with other data. Across the 59 countries, the median loan/deposit ratio is92.3% (in Greece). The median loan/asset ratio is 56.0% (in Poland). The median loan/GDP ratio was63.9% in India. From Q308, we have included a new section that examines the risks associated with each country’sbanking sector in a new way. We have essentially sought to ask this question: to what extent will thebanking sector likely need to source funding from banks in the rest of the world over the course of 2008.Given that the answer is not necessarily, on its own, meaningful, we have looked at other key issues suchas the size and recent movement in the loan/deposit ratio, macro-economic developments and recentmovements in financial markets. Two general themes pervade the banking sectors of the Asia-Pacific region. The first is that the excesssavings within Greater China and Japan remain enormous and are likely to grow. One expression of thiswill be the continuing growth in bank deposits that is, in absolute terms, considerably greater than thegrowth in lending. The second is that central banks have, in much of the region, been moving to tightenmonetary policy. This has already had an impact on the behaviour of the banks. As in previous reports, we include a SWOT analysis for Thailand. The overall picture is one of aneconomy - and a banking sector - that may well be continue to be overshadowed by political events.Nevertheless, a banking sector that has been recapitalised (and consolidated) in the wake of the 1997-98crisis has - over the past years - recovered quite strongly and has the potential to grow significantly overthe medium term. The key word, though, is “potential”. Perhaps because of the political problems, lendinggrew by less than 5% during 2007. Deposits did not grow at all. Given that the overall economicenvironment has been benign, the obvious implication is that businesses and (wealthier) households haveeither not been using banks at all or have been using banks in other countries in the region (mostobviously, Singapore). Since Q108, we have calculated, on a consistent basis, a Commercial Bank Business Environment Rating(CBBER) for each of the 59 countries surveyed. The CBBER includes an assessment of the limits ofpotential returns: it does this by taking into account the size, growth potential and bancassurancepotential of the banking sector, as well as aspects of the economy in 2007. The CBBER also depends onan assessment of the risks to the realisation of potential returns: this reflects BMI’s assessments ofoverall country risk, together with the regulatory and competitive environment.Thailand’s overall CBBER is 62.3. Within the limits to potential return, the banking market structure andthe country structure are fairly closely rated - with scores of 66.3 and 57.3 respectively. Within the risksto the realisation of potential returns, the banking elements and the country elements, by contrast, differsignificantly in their rating - with respective scores of 73.3 and 53.6. Get Full Details About This Report >> |
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