Thailand's banking system outlook stable, says Moody's

Thai banks have the financial flexibility to withstand a substantial deterioration in asset quality, according to Moody's stress tests.

Moody's Investors Service says the outlook for Thailand's banking system over the next 12 to 18 months is stable.

"The stable outlook is underpinned by our view that reconstruction and inventory replenishment activities will generate the rebound as firms normalize production and the government implements programs introduced after last year's massive floods," said Karolyn Seet, a Moody's Assistant Vice President and Analyst.

Moody's expects annual loan growth of 5%-10%, with the infrastructure and manufacturing sectors accounting for the bulk of the new loans.

Under Moody's adverse scenario, in which non-performing loans reach an average of 10% throughout their loan books, the capital levels of all Moody's-rated banks will remain within a 7%-16% range.

The banking system's overall funding and liquidity profile is also stable, with liquid assets accounting for 30% of total assets, while customer deposits make up 75% of total funding.

Moody's rates 10 banks in Thailand, including eight commercial banks and two policy banks. The eight commercial banks accounted for approximately 89% of total banking system assets as at end-2011.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia