Despite challenges, cross-border issuance likely to revive as market improves in 2010
Moody's Investors Service says in a new report that issuance in the Asian structured finance market will rise moderately in 2010, as investor interest makes a comeback, and the price gap between investors and sponsors narrows.
"The performance outlook for Korean RMBS and auto loan ABS is stable.
Korean residential mortgage loans have a recovery rate of over 99%, while the performance of Korean auto loans has been stable, with no marked deterioration during the credit crisis," says Jerome Cheng, a Moody's Vice President and author of the report.
"The performance outlook for Korean credit card ABS and Singaporean CMBS is negative. The negative outlook on Korean credit card receivables is based on potential deterioration in cardholders' payment ability. Korean household debt is at an all-time high, and a rise in interest rates would
hurt cardholders' ability to pay down unsecured credit card receivables.
For commercial properties in Singapore, the oversupply of office and industrial space and a weak economy are adding pressure to both vacancy and rental rates," says Mr. Cheng.
However, Moody's sees no rating implications on the rated transactions due to asset performance. "Given the level of subordination and the structural mechanisms present, we do not expect any rating actions, even for the two asset classes on which we have a negative outlook," says Mr. Cheng.
In its outlook for activities in 2010, the rating agency says that Korea, the largest securitization market in this region, will issue some cross-border ABS, RMBS, and covered bond transactions. Investor interest is evident, given that Korean receivables did not deteriorate much during the crisis. Rather, they have all improved, as Korea's economy started to improve.
In its review of 2009, Moody's notes that the fallout from the credit crunch significantly impacted the issuance from the Asian structured finance market -- with the exceptions of the domestic markets in Korea and India.
Korea's domestic and cross-border issuance in 2009 was USD33.0 billion, 87.6% of the region's total USD37.7 billion issuance. Korea's domestic market was dominated by project finance securitizations and RMBS, while its cross-border market generated all the foreign currency-denominated issuance in the region, including Asia's first covered bond transaction.
Moody's rating actions in 2009 were mainly downgrades related to changes in counterparty ratings and the change in Korea's local currency bond ceiling. "The downgrades were not driven by pformance deterioration in the underlying receivables. If anything, the performance of these receivables is well within our expectations," explains Mr. Cheng.
Moody's also changed its assumptions for three transactions, as perceived levels of risk increased. Two of them are deferred payment transactions in Singapore where the underlying residential property buyers' default risk had increased and the property values had declined. The third one is a Real Estate Investment Trust (REIT) in Taiwan where the REIT had acquired a new property through increased leverage. The ratings of these three transactions were subsequently downgraded.
The report discusses Moody's expectations for the Asian structured inance market in 2010, examines the outlook for cross-border Korean RMBS and ABS and Singaporean CMBS, summarizes issuance activities in 2009, and discusses collateral performance and the rating downgrades in
2009.
The report, "Asian Structured Finance: 2009 Review and 2010 Outlook" can be accessed at www.moodys.com.
Sunday, February 7, 2010
“THAI CONSUMER CONFIDENCE IN FOURTH QUARTER OF 2009 REACHED THE HIGHEST LEVEL SINCE 2008” SAYS NIELSEN
THAI Consumer MORE OPTIMISTIC ABOUT PERSONAL FINANCES AND JOB SECURITY IN 2010 But Spending Still Restrained
Consumer confidence in Thailand during the fourth quarter 2009 reached its highest level since mid 2008, driven by improved job prospects and better personal finances, according to the Global Consumer Confidence Survey released today by The Nielsen Company.
An increase in consumer confidence in Asian markets, as well as Brazil, continues to reflect signs that the economy is emerging from a global recession and, in some markets, the recovery is accelerating, according to the latest survey. Results of the Nielsen survey highlighted that consumer confidence gains in markets recovering fastest from recession – including Hong Kong, China, Singapore, India and Brazil – have fueled renewed willingness to spend by many consumers as they head into 2010.
While eight of the top 10 most confident markets in the fourth quarter of 2009 came from Asia Pacific, including emerging markets Indonesia (ranked 1st) and India (ranked 2nd), consumers in two of Asia’s most developed markets, South Korea and Japan, were the least confident. Brazil (ranked 3rd) and Canada (ranked 10th) were the only countries outside of Asia to make the top 10.
In Asia Pacific, Hong Kong recorded the highest consumer confidence increase for the second consecutive quarter in quarter four (Q4) – up seven index points from 93 in Q3 2009 to 100 (on a scale of 0 to 200 Index points) in Q4. Confidence in Hong Kong rose a total of 21 points since June 2009.
Globally, between June and December last year, the Nielsen Global Consumer Confidence Index rose five points from 82 to 87 while consumer confidence in Thailand increased nine points from 86 to 95.
The Nielsen survey shows that consumers in the past six months have become more optimistic about their country emerging from recession with better job prospects and personal finances. This is another sign that global recovery is heading in the right direction.
In Thailand, Nielsen found consumers became more optimistic about the economy in the fourth quarter of 2009. The percentage of Thais who said they believe the country is currently in a recession dropped for the fourth consecutive quarter– down from 91 percent in Q1 to 70 percent in Q4 of 2009.
Aaron Cross, Managing Director of The Nielsen Company, Thailand said “A year ago the world was in free-fall and consumer confidence hit an all time low in Nielsen’s global index. Thai consumer confidence also plummeted to it lowest record in Q1 2009. Since the Thai government reacted quickly to implement a significant stimulus program we have seen the consumer confidence index continue to rise throughout the year of 2009 showing an increase from 81 in Q1 to 86 in Q2 and 94 in Q3”.
Thai Consumers More Optimistic About Personal Finances
More than half (55%) of Thai consumers surveyed said their personal financial outlook for 2010 will be excellent or good compared to 45 percent last June.
Asia is also leading the way in increased discretionary spending. Chinese consumers topped global rankings (in discretionary spending) for investing in stocks and mutual funds and new technology products, and are ranked second globally for spending on new clothes and holidays. Thai consumers, however are not ready to start spending yet with 64 percent saying now is not a good time to spend - up from 60 percent in Q3.
Job Prospects Looking Up
The economy remains the top concern of Thai consumers however the concern for job security continued to decline in Q4 2009. In December 2009, 40 percent of Thai consumers described job prospects for 2010 as excellent or good compared with only 15 percent in Q1 2009, 27 percent in Q2 2009 and 38 percent in Q3 2009.
How do Thais utilize spare cash?
Thai consumers are cautious about discretionary spending. After covering necessary living expenses, Thais continue to put their spare cash into savings (59%). This has been the favorite mode of spare cash utilization for Thais since the year of 2006. After savings, holidays/vacations (47%) investing in retirement funds (30%), and home improvement and decoration (28%) were the three most popular spending options.
Discretionary spending
According to Nielsen’s survey on consumer behavior, Thai consumers will cut back on the following expenses
Spend less on new clothes (64%)Cut down on out of home entertainment (58%)Try to save on gas and electricity (55%)Delay upgrading technology, e.g. PC, mobile phone (44%)Cut down on holidays/ short breaks (42%)
About the Nielsen Global Consumer Confidence Survey
The Nielsen Global Consumer Confidence Survey was conducted between December 4 -18, 2009 and polled over 17,500 consumers in Asia Pacific, Europe, Latin America, the Middle East and North America about their confidence levels and economic outlook. The Nielsen Consumer Confidence Index is developed based on consumers’ confidence in the job market, status of their personal finances and readiness to spend. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications. The privately held company is active in more than 100 countries, with headquarters in New York, USA.
Consumer confidence in Thailand during the fourth quarter 2009 reached its highest level since mid 2008, driven by improved job prospects and better personal finances, according to the Global Consumer Confidence Survey released today by The Nielsen Company.
An increase in consumer confidence in Asian markets, as well as Brazil, continues to reflect signs that the economy is emerging from a global recession and, in some markets, the recovery is accelerating, according to the latest survey. Results of the Nielsen survey highlighted that consumer confidence gains in markets recovering fastest from recession – including Hong Kong, China, Singapore, India and Brazil – have fueled renewed willingness to spend by many consumers as they head into 2010.
While eight of the top 10 most confident markets in the fourth quarter of 2009 came from Asia Pacific, including emerging markets Indonesia (ranked 1st) and India (ranked 2nd), consumers in two of Asia’s most developed markets, South Korea and Japan, were the least confident. Brazil (ranked 3rd) and Canada (ranked 10th) were the only countries outside of Asia to make the top 10.
In Asia Pacific, Hong Kong recorded the highest consumer confidence increase for the second consecutive quarter in quarter four (Q4) – up seven index points from 93 in Q3 2009 to 100 (on a scale of 0 to 200 Index points) in Q4. Confidence in Hong Kong rose a total of 21 points since June 2009.
Globally, between June and December last year, the Nielsen Global Consumer Confidence Index rose five points from 82 to 87 while consumer confidence in Thailand increased nine points from 86 to 95.
The Nielsen survey shows that consumers in the past six months have become more optimistic about their country emerging from recession with better job prospects and personal finances. This is another sign that global recovery is heading in the right direction.
In Thailand, Nielsen found consumers became more optimistic about the economy in the fourth quarter of 2009. The percentage of Thais who said they believe the country is currently in a recession dropped for the fourth consecutive quarter– down from 91 percent in Q1 to 70 percent in Q4 of 2009.
Aaron Cross, Managing Director of The Nielsen Company, Thailand said “A year ago the world was in free-fall and consumer confidence hit an all time low in Nielsen’s global index. Thai consumer confidence also plummeted to it lowest record in Q1 2009. Since the Thai government reacted quickly to implement a significant stimulus program we have seen the consumer confidence index continue to rise throughout the year of 2009 showing an increase from 81 in Q1 to 86 in Q2 and 94 in Q3”.
Thai Consumers More Optimistic About Personal Finances
More than half (55%) of Thai consumers surveyed said their personal financial outlook for 2010 will be excellent or good compared to 45 percent last June.
Asia is also leading the way in increased discretionary spending. Chinese consumers topped global rankings (in discretionary spending) for investing in stocks and mutual funds and new technology products, and are ranked second globally for spending on new clothes and holidays. Thai consumers, however are not ready to start spending yet with 64 percent saying now is not a good time to spend - up from 60 percent in Q3.
Job Prospects Looking Up
The economy remains the top concern of Thai consumers however the concern for job security continued to decline in Q4 2009. In December 2009, 40 percent of Thai consumers described job prospects for 2010 as excellent or good compared with only 15 percent in Q1 2009, 27 percent in Q2 2009 and 38 percent in Q3 2009.
How do Thais utilize spare cash?
Thai consumers are cautious about discretionary spending. After covering necessary living expenses, Thais continue to put their spare cash into savings (59%). This has been the favorite mode of spare cash utilization for Thais since the year of 2006. After savings, holidays/vacations (47%) investing in retirement funds (30%), and home improvement and decoration (28%) were the three most popular spending options.
Discretionary spending
According to Nielsen’s survey on consumer behavior, Thai consumers will cut back on the following expenses
Spend less on new clothes (64%)Cut down on out of home entertainment (58%)Try to save on gas and electricity (55%)Delay upgrading technology, e.g. PC, mobile phone (44%)Cut down on holidays/ short breaks (42%)
About the Nielsen Global Consumer Confidence Survey
The Nielsen Global Consumer Confidence Survey was conducted between December 4 -18, 2009 and polled over 17,500 consumers in Asia Pacific, Europe, Latin America, the Middle East and North America about their confidence levels and economic outlook. The Nielsen Consumer Confidence Index is developed based on consumers’ confidence in the job market, status of their personal finances and readiness to spend. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications. The privately held company is active in more than 100 countries, with headquarters in New York, USA.
Friday, February 5, 2010
OCBC Bank launches a dedicated private bank - Bank of Singapore
(“OCBC Bank”) today announced that it has completed the acquisition of Singapore-based ING Asia Private Bank Limited and its subsidiaries (together, “IAPB”) for an investment amount of approximately US$1,446 million or S$2,024 million. IAPB is now a wholly-owned private banking subsidiary of OCBC Bank and has been re-named Bank of Singapore Limited (“Bank of Singapore“). Bank of Singapore will be led by Mr Renato (“Bing”) de Guzman, the CEO of the former IAPB. The private banking businesses of IAPB and OCBC Bank will be combined and operate as Bank of Singapore. This will result in the creation of a leading Asian private bank with over 7,000 clients and total private client assets under management of approximately US$23 billion. It will also occupy a unique position as the only dedicated private bank that is headquartered in Singapore. “The successful completion of this acquisition marks a significant milestone in our private banking business. Our much larger private bank will significantly benefit customers from both IAPB and OCBC. OCBC Private Bank customers will benefit from IAPB’s fully open architecture product platform and proprietary research, while IAPB customers will benefit from the access to OCBC’s extensive branch network and products and services that were previously not available to them, such as property financing, brokerage services, insurance, retail and SME banking products and services. We are committed to investing more in this franchise and to better serve the needs of our high networth customers across our key markets.” said Mr David Conner, CEO of OCBC Bank. Mr Renato (“Bing”) de Guzman, CEO of Bank of Singapore, said, “As part of the OCBC family and with the strong backing of OCBC, we remain totally committed and dedicated to helping our clients to seek the best outcome for their financial goals, and to grow and protect their wealth. I am confident that Bank of Singapore will continue to grow and capture greater market share in existing and new markets. We will continue to focus on attracting some of the best talents in key markets and on talent development for long term growth and professional development as part of the OCBC Group.” “I warmly welcome OCBC Private Bank clients to experience the enhanced products and services that Bank of Singapore can offer and we also thank our IAPB clients for their continuing support. Over the next few months, as we align our services, our focus will be on ensuring continuity and minimal disruption to our service levels.” added Mr de Guzman. Brand Identity The Bank of Singapore brand is a reflection of its strategic home base in Singapore, which is a sound financial hub that is internationally known for its efficiency, transparency and best-in-class services. The brand also leverages on Singapore’s unique position as a rapidly growing private banking hub, attracting money flows not just from Asia but increasingly from the Middle East and Europe. Bank of Singapore offers its clients the best of both worlds – combining global know how with a distinct level of service that is among the best in the industry. It is Asia’s global private bank. The design treatment of the logo is intended to capture a strong sense of modernity. The words BANK and SINGAPORE have been rendered in bold to reflect the unique location and distinct perspective that comes from being the only dedicated Singapore-headquartered private bank. This Asian centre is complemented with the modifier “International Private Banking” which clearly positions Bank of Singapore as one that is global in its scope and scale. The red circle and stripes have been taken from the original OCBC Bank logo to reinforce the link between Bank of Singapore and OCBC Bank. The stripes have been duplicated to create two different parts, signifying the coming together of OCBC Bank’s private bank business and IAPB to become one dedicated entity to serve the needs of high networth individuals in Asia and globally. The circular nature of the icon has significance in Asia because it represents the enduring relationship Bank of Singapore has with its customers. To build brand awareness and reach out to its customers, Bank of Singapore will be launching a pan-Asia brand advertising campaign. The new integrated media campaign debuts today in global broadcast media, international as well as local print and online media reaching out to its customers around the world.
Saturday, January 30, 2010
KBank and CMBC open borders toward financial service excellence
KASIKORNBANK, in collaboration with China Minsheng Banking Corporation (CMBC), has opened a new chapter in the Sino-Thai banking business, opening the financial frontier between the two countries by merging the service networks of the two banks to allow cross-border services. Both parties target joint lending to Chinese SMEs at 6 billion Baht this year.
Mr. Dong Wenbiao, Deputy Director of the Economic Committee of the Chinese People’s Political Consultative Conference (CPPCC), and Chairman of the Board of Directors of CMBC, chaired the January 28 signing ceremony at Chomphu Phukha Reception Room, KBank’s head office to open the financial frontier between the two nations. The move is aimed to enhance collaboration in financial services for customers of KBank and CMBC. KASIKORNBANK Chief Executive Officer Banthoon Lamsam and Mr. Hong Qi, President and Chief Executive Officer of CMBC, also signed the agreement at the ceremony.
Mr. Dong Wenbiao, Chairman of the Board of Directors of CMBC, said KBank and CMBC have been business partners since 2004. The two banks have together studied and developed a financial service platform and provided loans for SMEs in China with a risk management technique that has provided sound financial management for Chinese mainland SMEs. This joint project has seen significant progress, and has proven successful.
Over the past 5 years, trade between China and ASEAN has risen from USD 59 billion to USD 250 billion. On January 1, 2010, the ASEAN-China Free Trade Area (FTA) officially started, with trading volume between the two to be increased to 13 percent of total world trade volume, becoming a major economic community covering 11 countries with a total population of 1.9 billion and combined GDP of USD 6 trillion. The ASEAN-China FTA is the most populous free trade area and the world’s most powerful economic driver among developing countries. Thus, the collaboration between KBank and CMBC in diverse aspects will serve as a strong base to support and provide convenience in business operations between the two countries, which are expected to grow continually.
Mr. Banthoon Lamsam, CEO of KBank, said the Bank has expanded business in China in collaboration with CMBC, China’s leading private bank, by providing credits for SMEs in the Chinese mainland, which is one of the key business strategies of KBank in the country. The joint credit provided for China’s SMEs measured CNY 178 million, or around 900 million Baht. As the SME market in China is quite large, with a huge demand for funding, the Bank has targeted provision of CNY 1.2 billion, or approximately 6 billion Baht, of joint lending in 2010.
Aside from SME lending in China, KBank and CMBC are planning to open the Sino-Thai financial frontier via collaboration among the networks of 400 CMBC branches in China, KBank branch and representative offices in China, and 800 KBank branches in Thailand, in order to directly facilitate trade and investment between customers in the two countries, under the “boundless business” concept.
Thus, the cooperation in business expansion for customers in China and Thailand includes cross-border RMB funds transfer, wealth management such as mutual fund investments, securities trading, and deposits, credits such as syndicated loans and factoring, financial advisory services, derivative services, bancassurance, and exchange of economic and business information between the two banks.
“From now on, KBank customers will be able to use financial services offered by CMBC in China,” Banthoon said. “ For example, KBank and CMBC jointly provide RMB-denominated credits to Thai companies investing in China, and RMB-denominated credits to Chinese companies investing in Thailand. The services also include the Bank’s other financial products in four main groups including deposits, investments, risk management, RMB foreign exchange services, and international trade. Such cooperation is to innovate towards financial service excellence of the two countries in a way that will largely benefit businessmen of both nations.”
In addition, the two banks will exchange knowledge and banking management innovations. KBank is the number-one player among SME businesses in Thailand, and widely recognized as an Asian leader in providing financial services to SMEs under the concept of “Customer Centricity”. The exchange of knowledge in brand building, marketing, product development, and a complete credit management system, in combination with business administration techniques in China from CMBC, will benefit business operations to efficiently serve theneeds of SME customers in China.
Mr. Dong Wenbiao, Deputy Director of the Economic Committee of the Chinese People’s Political Consultative Conference (CPPCC), and Chairman of the Board of Directors of CMBC, chaired the January 28 signing ceremony at Chomphu Phukha Reception Room, KBank’s head office to open the financial frontier between the two nations. The move is aimed to enhance collaboration in financial services for customers of KBank and CMBC. KASIKORNBANK Chief Executive Officer Banthoon Lamsam and Mr. Hong Qi, President and Chief Executive Officer of CMBC, also signed the agreement at the ceremony.
Mr. Dong Wenbiao, Chairman of the Board of Directors of CMBC, said KBank and CMBC have been business partners since 2004. The two banks have together studied and developed a financial service platform and provided loans for SMEs in China with a risk management technique that has provided sound financial management for Chinese mainland SMEs. This joint project has seen significant progress, and has proven successful.
Over the past 5 years, trade between China and ASEAN has risen from USD 59 billion to USD 250 billion. On January 1, 2010, the ASEAN-China Free Trade Area (FTA) officially started, with trading volume between the two to be increased to 13 percent of total world trade volume, becoming a major economic community covering 11 countries with a total population of 1.9 billion and combined GDP of USD 6 trillion. The ASEAN-China FTA is the most populous free trade area and the world’s most powerful economic driver among developing countries. Thus, the collaboration between KBank and CMBC in diverse aspects will serve as a strong base to support and provide convenience in business operations between the two countries, which are expected to grow continually.
Mr. Banthoon Lamsam, CEO of KBank, said the Bank has expanded business in China in collaboration with CMBC, China’s leading private bank, by providing credits for SMEs in the Chinese mainland, which is one of the key business strategies of KBank in the country. The joint credit provided for China’s SMEs measured CNY 178 million, or around 900 million Baht. As the SME market in China is quite large, with a huge demand for funding, the Bank has targeted provision of CNY 1.2 billion, or approximately 6 billion Baht, of joint lending in 2010.
Aside from SME lending in China, KBank and CMBC are planning to open the Sino-Thai financial frontier via collaboration among the networks of 400 CMBC branches in China, KBank branch and representative offices in China, and 800 KBank branches in Thailand, in order to directly facilitate trade and investment between customers in the two countries, under the “boundless business” concept.
Thus, the cooperation in business expansion for customers in China and Thailand includes cross-border RMB funds transfer, wealth management such as mutual fund investments, securities trading, and deposits, credits such as syndicated loans and factoring, financial advisory services, derivative services, bancassurance, and exchange of economic and business information between the two banks.
“From now on, KBank customers will be able to use financial services offered by CMBC in China,” Banthoon said. “ For example, KBank and CMBC jointly provide RMB-denominated credits to Thai companies investing in China, and RMB-denominated credits to Chinese companies investing in Thailand. The services also include the Bank’s other financial products in four main groups including deposits, investments, risk management, RMB foreign exchange services, and international trade. Such cooperation is to innovate towards financial service excellence of the two countries in a way that will largely benefit businessmen of both nations.”
In addition, the two banks will exchange knowledge and banking management innovations. KBank is the number-one player among SME businesses in Thailand, and widely recognized as an Asian leader in providing financial services to SMEs under the concept of “Customer Centricity”. The exchange of knowledge in brand building, marketing, product development, and a complete credit management system, in combination with business administration techniques in China from CMBC, will benefit business operations to efficiently serve theneeds of SME customers in China.
VocaLink buys out joint venture partner in OneVu
VocaLink, the international payment transaction specialist, today announced that it has bought out its joint venture partner, Fiserv, to become the sole owner of OneVu, the consolidated electronic bill and data presentment service. Miles Quitmann, OneVu’s Managing Director has taken the decision to leave the company at the end of January to pursue new opportunities. Fred Bar, Managing Director Euro Services will take functional responsibility for OneVu and complete the integration into VocaLink’s service portfolio.
OneVu is a critical online banking service for many of the UK’s leading corporates and banks including Lloyds Banking Group and The Royal Bank of Scotland. OneVu already has 280 million bills under management and is supporting its corporate customers in their move away from costly paper bills, reducing their impact on the environment. By consolidating a number of online bills, UK consumers can benefit from reduced prices and the convenience of having a number of household bills in one secure place.
Marion King, Chief Executive Officer at VocaLink, commented “By integrating OneVu into VocaLink we can deliver greater efficiency to our banking customers and expand our retail service. VocaLink is well placed to help OneVu grow and launch new services that benefit both corporates and consumers. I would like to take this opportunity to thank Miles for his considerable contribution in leading OneVu and successfully building the customer base and service portfolio.“
OneVu is a critical online banking service for many of the UK’s leading corporates and banks including Lloyds Banking Group and The Royal Bank of Scotland. OneVu already has 280 million bills under management and is supporting its corporate customers in their move away from costly paper bills, reducing their impact on the environment. By consolidating a number of online bills, UK consumers can benefit from reduced prices and the convenience of having a number of household bills in one secure place.
Marion King, Chief Executive Officer at VocaLink, commented “By integrating OneVu into VocaLink we can deliver greater efficiency to our banking customers and expand our retail service. VocaLink is well placed to help OneVu grow and launch new services that benefit both corporates and consumers. I would like to take this opportunity to thank Miles for his considerable contribution in leading OneVu and successfully building the customer base and service portfolio.“
Hong Kong and Indonesia launch a new cross-border payment-versus-payment link
The Hong Kong Monetary Authority (HKMA) and Bank Indonesia jointly announced today (Monday) that the new cross-border payment-versus-payment (PvP) link between Hong Kong’s US Dollar real time gross settlement (RTGS) system and Indonesia’s Rupiah RTGS system has been launched on 25 January 2010. The link, which starts operation today, will eliminate settlement risk in foreign exchange transactions between the US Dollars and Indonesian Rupiah by ensuring the simultaneous delivery of US Dollars in Hong Kong and Rupiah in Indonesia. Banks in Indonesia can better manage their counterparty risks arising from the foreign exchange transactions and enhance their operational efficiency in settling those transactions during Asian hours.
On 24 October 2008, the HKMA and Bank Indonesia signed a Memorandum of Understanding on the establishment of the PvP link. Following the completion of system development and testing, the link went live on schedule today.
The link is operated in Indonesia by Bank Indonesia and in Hong Kong by Hong Kong Interbank Clearing Limited, which operates the interbank clearing systems in Hong Kong, and is jointly and equally owned by the HKMA and the Hong Kong Association of Banks.
Mr Eddie Yue, Deputy Chief Executive of the HKMA, said, "The PvP link between the US Dollar RTGS system in Hong Kong and the Rupiah RTGS system in Indonesia makes settlement safer and more efficient by eliminating the settlement risk arising from the delivery of two currencies in different time zones. I am glad that Bank Indonesia and the HKMA share the same view in improving the infrastructure coordination among the two economies for promoting the monetary and financial stability."
Mr S. Budi Rochadi, Deputy Governor of Bank Indonesia, said, "The implementation of the USD/IDR PvP link between the Indonesian Rupiah RTGS system and the US Dollar RTGS system in Hong Kong can help mitigate settlement risk in USD/IDR inter-bank FX trades in Indonesia. The implementation also gives benefits to Indonesian banks by allowing immediate utilization of IDR and USD since both currencies are settled real-time, simultaneously and in Asian time zone and potentially making wider choice of counterparties in inter-bank USD/IDR market as the market players are not constrained by counterparty trading limit representing FX settlement risk exposure. In turn, this could promote safe, sound and efficient FX market in the country."
On 24 October 2008, the HKMA and Bank Indonesia signed a Memorandum of Understanding on the establishment of the PvP link. Following the completion of system development and testing, the link went live on schedule today.
The link is operated in Indonesia by Bank Indonesia and in Hong Kong by Hong Kong Interbank Clearing Limited, which operates the interbank clearing systems in Hong Kong, and is jointly and equally owned by the HKMA and the Hong Kong Association of Banks.
Mr Eddie Yue, Deputy Chief Executive of the HKMA, said, "The PvP link between the US Dollar RTGS system in Hong Kong and the Rupiah RTGS system in Indonesia makes settlement safer and more efficient by eliminating the settlement risk arising from the delivery of two currencies in different time zones. I am glad that Bank Indonesia and the HKMA share the same view in improving the infrastructure coordination among the two economies for promoting the monetary and financial stability."
Mr S. Budi Rochadi, Deputy Governor of Bank Indonesia, said, "The implementation of the USD/IDR PvP link between the Indonesian Rupiah RTGS system and the US Dollar RTGS system in Hong Kong can help mitigate settlement risk in USD/IDR inter-bank FX trades in Indonesia. The implementation also gives benefits to Indonesian banks by allowing immediate utilization of IDR and USD since both currencies are settled real-time, simultaneously and in Asian time zone and potentially making wider choice of counterparties in inter-bank USD/IDR market as the market players are not constrained by counterparty trading limit representing FX settlement risk exposure. In turn, this could promote safe, sound and efficient FX market in the country."
Friday, January 29, 2010
TMB Selects SAS Solution for End to End Business Intelligence Platform Project
Thai Military Bank Public Co., Ltd. (TMB) selected the Credit Scoring Solution for Banking of SAS for its End to End Business Intelligence Project with a project value of almost 20 million Baht.
This Project is developed to offer effective and transparent risk management through powerful analytical tools which can support all stakeholders involved in Credit activities in the assessment and monitoring of the portfolio’s risk performance.
“Previously, the credit assessment process was complex manual and slow due to redundant verification of data reliability before executing reports along with operational and security problems,” said Mrs. Fabienne Libert, Senior Vice President, Retail Credit Group, TMB Bank Public Co., Ltd. . “This Project will enhance our operational efficiency and allow us to directly manage credit risks with data models while establishing governance standards data processing effectively at greater speed. Moreover, it creates transparency risk management information for all and one version of the Truth.”
“TMB decided to select SAS for the End to End Business Intelligence Project since October 2009 as SAS solutions can comprehensively cover our requirements, especially end-to-end straight through process of data starting from data extraction until delivery of information to end-users with advanced analytical tools.”
About SAS
SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions delivered within an integrated framework, SAS helps customers at more than 45,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world The Power to Know
This Project is developed to offer effective and transparent risk management through powerful analytical tools which can support all stakeholders involved in Credit activities in the assessment and monitoring of the portfolio’s risk performance.
“Previously, the credit assessment process was complex manual and slow due to redundant verification of data reliability before executing reports along with operational and security problems,” said Mrs. Fabienne Libert, Senior Vice President, Retail Credit Group, TMB Bank Public Co., Ltd. . “This Project will enhance our operational efficiency and allow us to directly manage credit risks with data models while establishing governance standards data processing effectively at greater speed. Moreover, it creates transparency risk management information for all and one version of the Truth.”
“TMB decided to select SAS for the End to End Business Intelligence Project since October 2009 as SAS solutions can comprehensively cover our requirements, especially end-to-end straight through process of data starting from data extraction until delivery of information to end-users with advanced analytical tools.”
About SAS
SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions delivered within an integrated framework, SAS helps customers at more than 45,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world The Power to Know
Sunday, January 24, 2010
KBank and J.P. Morgan team to guarantee one-day U.S. dollar transfers to China
KASIKORNBANK has announced that it is the first Thai bank to provide U.S. dollar-denominated funds transfers service through the use of J.P. Morgan’s U.S.Dollar Clearing – Asia Direct, an intelligent routing technology that allows the funds transfer to directly reach the destination branch in key economic zones throughout China within the same day. If the banks in China cannot receive the funds within one day, KBank will refund the transfer fee. The excellent servicing standards of the two Banks will facilitate exporters to manage their time, expenses and liquidity without any difficulties.
Mr. Songpol Chevapanyaroj, Executive Vice President, KASIKORNBANK, said China is currently one of the key trading partners of Thailand. The trading volume of the two countries measured 1.19 trillion Baht in 2009, and has grown an average of 27 percent per annum since 2003. However, funds transfers have constrained trade between Thailand and China due to complications in funds receipt times caused by geography, organization, and time zone differences. China has more than 50 cities in 34 provinces with an earlier time zone than Thailand. This has made it difficult to know exactly when funds would reach recipients.
KBank has been aware of this problem and developed operations that allow U.S. dollar-denominated funds transfers from Thailand to bank branches in China within one day, with the cooperation from J.P. Morgan, one of the world’s leading banks in international funds transfer.
Thus, KBank can now provide a time guarantee for customers who transfer U.S. dollar-denominated funds to around 700 bank branches in China. If a customer completes the transaction before noon, the bank branch in China will receive the funds within one day. If the funds are not received within one day, the Bank will refund the transfer fee to the customer.
Mr. Percy Batliwalla, Managing Director and Asia Pacific head of financial institutions - banks at J.P.Morgan Treasury Services said that “As a result of the increasing intra-Asia trade flows, enhancing the efficiencies of U.S.Dollar payments, particularly within the Greater China region and Japan has become essential for all banks within Asia.
Mr. Batliwalla added that Thailand remains an important market for J.P.Morgan, and we are confident that our unique U.S.Dollar Clearing - Asia Direct solution will enable KASIKORNBANK to provide greater efficiencies to its existing and potential clients, thereby enhancing the bank's competitiveness.
In addition, this service, developed in cooperation between KBank and J.P. Morgan, will increase potential of businesses that need to make funds transfers to China, as they will more efficiently manage liquidity without the need to wait several days for transfers to be completed. Such businesses will be able to more easily control their spending without the need to submit funds transfer orders through several branch layers.
Mr. Songpol added that KBank’s network in China includes leading banks covering key economic zones throughout the country, with a total of 700 outlets. The Bank hopes the new service will match customer needs and further build confidence in the Bank as a trusted business partner. Businesses that wish to use the service can contact any KBank branch nationwide, or ask for more information at the K-BIZ Contact Center, tel. 0 2888 8822.
About KASIKORNBANK
KASIKORNBANK (KBank) has for over 60 years of operation been regarded as Thailand's premier banking institution, and a renowned forward thinking bank which always continues to deliver innovative financial services to customers. The founding of KASIKORNBANKGROUP in 2005, raised the Bank to a comprehensive financial service provider with one singular brand of quality service - K Excellence. For more information, visit www.kasikornbank.com.
About J.P. Morgan
J.P. Morgan is the world's largest U.S.Dollar clearing and commercial bank. J.P.Morgan Treasury Services leverages the services and products of its Worldwide Securities Services division, as well as its Investment Bank, Asset Management and Private Bank lines of business to provide its clients with integrated banking solutions.
Mr. Songpol Chevapanyaroj, Executive Vice President, KASIKORNBANK, said China is currently one of the key trading partners of Thailand. The trading volume of the two countries measured 1.19 trillion Baht in 2009, and has grown an average of 27 percent per annum since 2003. However, funds transfers have constrained trade between Thailand and China due to complications in funds receipt times caused by geography, organization, and time zone differences. China has more than 50 cities in 34 provinces with an earlier time zone than Thailand. This has made it difficult to know exactly when funds would reach recipients.
KBank has been aware of this problem and developed operations that allow U.S. dollar-denominated funds transfers from Thailand to bank branches in China within one day, with the cooperation from J.P. Morgan, one of the world’s leading banks in international funds transfer.
Thus, KBank can now provide a time guarantee for customers who transfer U.S. dollar-denominated funds to around 700 bank branches in China. If a customer completes the transaction before noon, the bank branch in China will receive the funds within one day. If the funds are not received within one day, the Bank will refund the transfer fee to the customer.
Mr. Percy Batliwalla, Managing Director and Asia Pacific head of financial institutions - banks at J.P.Morgan Treasury Services said that “As a result of the increasing intra-Asia trade flows, enhancing the efficiencies of U.S.Dollar payments, particularly within the Greater China region and Japan has become essential for all banks within Asia.
Mr. Batliwalla added that Thailand remains an important market for J.P.Morgan, and we are confident that our unique U.S.Dollar Clearing - Asia Direct solution will enable KASIKORNBANK to provide greater efficiencies to its existing and potential clients, thereby enhancing the bank's competitiveness.
In addition, this service, developed in cooperation between KBank and J.P. Morgan, will increase potential of businesses that need to make funds transfers to China, as they will more efficiently manage liquidity without the need to wait several days for transfers to be completed. Such businesses will be able to more easily control their spending without the need to submit funds transfer orders through several branch layers.
Mr. Songpol added that KBank’s network in China includes leading banks covering key economic zones throughout the country, with a total of 700 outlets. The Bank hopes the new service will match customer needs and further build confidence in the Bank as a trusted business partner. Businesses that wish to use the service can contact any KBank branch nationwide, or ask for more information at the K-BIZ Contact Center, tel. 0 2888 8822.
About KASIKORNBANK
KASIKORNBANK (KBank) has for over 60 years of operation been regarded as Thailand's premier banking institution, and a renowned forward thinking bank which always continues to deliver innovative financial services to customers. The founding of KASIKORNBANKGROUP in 2005, raised the Bank to a comprehensive financial service provider with one singular brand of quality service - K Excellence. For more information, visit www.kasikornbank.com.
About J.P. Morgan
J.P. Morgan is the world's largest U.S.Dollar clearing and commercial bank. J.P.Morgan Treasury Services leverages the services and products of its Worldwide Securities Services division, as well as its Investment Bank, Asset Management and Private Bank lines of business to provide its clients with integrated banking solutions.
Bangkok Bank named ‘Thailand Bond House of the Year 2009’ by IFR Asia
Bangkok Bank has won the ‘Thailand Bond House of the Year 2009’ award from IFR Asia, a leading regional financial magazine. This reinforces the bank’s outstanding performance in setting a new standard and bringing innovation to the debt capital market in Thailand despite last year’s market fluctuations.
Bangkok Bank Senior Vice President and Corporate Finance Department Manager Mr. Surabhan Purnagupta said being the first Thai bank that won IFR Asia’s ‘Thailand Bond House of the Year 2009’ award is another success and proud milestone of Bangkok Bank.
“This is the first year IFR Asia magazine presents the ‘Thailand Bond House of the Year’ award. The award is given to a financial institution that develops and adapts itself well in line with fluctuating markets as well as setting new standards and introducing innovation. The value of the debentures issued is not the only criteria for determining the winner, but also debenture structures that suit the diverse needs of issuers and investors”, Mr. Surabhan said.
IFR Asia magazine (Volume 630, December 2009) by Denise Wee said ‘Thanks to the low interest rate environment, retail inverters were the key driver for the baht bond market in 2009, which saw insurance skyrocket to bt304.4bn (US$ 9.19bn) up to mid-November compared to Bt198.3bn in 2008. Bangkok Bank made great strides in the review period leveraging off its large depositor base that allowed it to play a key role in major transactions. The bank notched up bookrunner volumes of Bt48.6bn from 21 issues.
‘Bangkok Bank’s success came on the back of its strong performance in the previous three years during which it increased its market share from 10.2% in 2007 to 15.8% in 2009. It was the largest band for an unlisted issuer in Thailand and impressive because it was fully placed out and upsized from Bt10bn to Bt12bn just nine months after BTSC has exited from its rehabilitation programme. Apart from BTSC’s deal, Bangkok Bank also played major underwriting roles in all the other marquee deals of 2009. The bank has also seen repeat business from a cache of core clients. Bangkok Bank cemented a strong relationship with PTT, having introduced it to the retail market in 2003. The bank also saw strong repeat business from issuers like Toyota Leasing Thailand and Siam Cement included PTT Exploration and Production.’
“Bangkok Bank is proud to have taken part in contributing to the development of Thailand’s bond market by creating and offering quality debt instruments to investors while taking into account benefits and fairness for all stakeholders – both issuers and investors. It is our honor to be trusted by Thailand’s leading companies who has always selected us to serve them continuously on bond transactions”, Mr. Surabhan added.
Bangkok Bank Senior Vice President and Corporate Finance Department Manager Mr. Surabhan Purnagupta said being the first Thai bank that won IFR Asia’s ‘Thailand Bond House of the Year 2009’ award is another success and proud milestone of Bangkok Bank.
“This is the first year IFR Asia magazine presents the ‘Thailand Bond House of the Year’ award. The award is given to a financial institution that develops and adapts itself well in line with fluctuating markets as well as setting new standards and introducing innovation. The value of the debentures issued is not the only criteria for determining the winner, but also debenture structures that suit the diverse needs of issuers and investors”, Mr. Surabhan said.
IFR Asia magazine (Volume 630, December 2009) by Denise Wee said ‘Thanks to the low interest rate environment, retail inverters were the key driver for the baht bond market in 2009, which saw insurance skyrocket to bt304.4bn (US$ 9.19bn) up to mid-November compared to Bt198.3bn in 2008. Bangkok Bank made great strides in the review period leveraging off its large depositor base that allowed it to play a key role in major transactions. The bank notched up bookrunner volumes of Bt48.6bn from 21 issues.
‘Bangkok Bank’s success came on the back of its strong performance in the previous three years during which it increased its market share from 10.2% in 2007 to 15.8% in 2009. It was the largest band for an unlisted issuer in Thailand and impressive because it was fully placed out and upsized from Bt10bn to Bt12bn just nine months after BTSC has exited from its rehabilitation programme. Apart from BTSC’s deal, Bangkok Bank also played major underwriting roles in all the other marquee deals of 2009. The bank has also seen repeat business from a cache of core clients. Bangkok Bank cemented a strong relationship with PTT, having introduced it to the retail market in 2003. The bank also saw strong repeat business from issuers like Toyota Leasing Thailand and Siam Cement included PTT Exploration and Production.’
“Bangkok Bank is proud to have taken part in contributing to the development of Thailand’s bond market by creating and offering quality debt instruments to investors while taking into account benefits and fairness for all stakeholders – both issuers and investors. It is our honor to be trusted by Thailand’s leading companies who has always selected us to serve them continuously on bond transactions”, Mr. Surabhan added.
Sunday, January 17, 2010
Article Looks At The Long-Term Effects Of The Recent Credit Crisis
In the wake of the 2007-2008 financial crisis, there has been much discussion about the prospects for an economic recovery over the next few quarters. But an article published yesterday by Standard & Poor's says that the more important issue is: What will happen over the next few decades? The article, which is titled "The New Normal (The Future Isn't What It Used To Be)," says that Standard & Poor's believes it will be a decade or more before the world and U.S. economies can hope to grow as rapidly as they did during the half-century or so preceding the recent crisis because they will have to bear increasing burdens. These will likely include:
--High personal debt and lower wealth in the U.S., which--combined with a rebounding though still-low saving rate--will slow the consumer spending that has powered much of U.S. and world growth.
--International trade and financial imbalances that are leading to a weaker dollar and a move away from dollar reserves.
--Stricter but inconsistent financial and other government regulation.
--A global financial system that has lost much of its capital and will need to operate with lower leverage, restricting loan availability.
--More risk-averse investors (some suddenly conservative because of recent losses, others approaching retirement and husbanding their wealth).
--Fiscal deficits in many countries, especially the U.S., the deficit of which could grow larger as the retirement wave hits.
--Rising health care costs that threaten the competitiveness of U.S. companies versus their overseas counterparts.
"We expect that the world economy will recover," said Standard & Poor's Chief Economist David Wyss. "But we think it's likely that it will look different once it does." For example, the events of the past two years likely have accelerated the relative decline in U.S. economic influence, as Asian economies have continued to grow while America's has contracted. In past decades, however, the U.S. and world economies have proved resilient. So while the future isn't as bright it seemed during the bygone boom, neither is it as bleak as it seemed only a year ago.
This article is part of a special report titled "The New Normal," which also will be published in the Jan. 27, 2010, edition of Standard & Poor's CreditWeek. The special report examines how certain industry sectors and financial markets could fundamentally change as a result of the recent credit crisis.
The report is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
--High personal debt and lower wealth in the U.S., which--combined with a rebounding though still-low saving rate--will slow the consumer spending that has powered much of U.S. and world growth.
--International trade and financial imbalances that are leading to a weaker dollar and a move away from dollar reserves.
--Stricter but inconsistent financial and other government regulation.
--A global financial system that has lost much of its capital and will need to operate with lower leverage, restricting loan availability.
--More risk-averse investors (some suddenly conservative because of recent losses, others approaching retirement and husbanding their wealth).
--Fiscal deficits in many countries, especially the U.S., the deficit of which could grow larger as the retirement wave hits.
--Rising health care costs that threaten the competitiveness of U.S. companies versus their overseas counterparts.
"We expect that the world economy will recover," said Standard & Poor's Chief Economist David Wyss. "But we think it's likely that it will look different once it does." For example, the events of the past two years likely have accelerated the relative decline in U.S. economic influence, as Asian economies have continued to grow while America's has contracted. In past decades, however, the U.S. and world economies have proved resilient. So while the future isn't as bright it seemed during the bygone boom, neither is it as bleak as it seemed only a year ago.
This article is part of a special report titled "The New Normal," which also will be published in the Jan. 27, 2010, edition of Standard & Poor's CreditWeek. The special report examines how certain industry sectors and financial markets could fundamentally change as a result of the recent credit crisis.
The report is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Saturday, January 2, 2010
Fitch Affirms United Overseas Bank's Thai Subsidiary
Fitch Ratings has today affirmed United Overseas Bank (Thai) Public Company Limited's (UOBT; formerly Bank of Asia) Long-term foreign currency Issuer Default Rating (IDR) at 'BBB+', Short-term foreign currency IDR at 'F2', National Long-term rating at 'AA+(tha)', National Short-term rating at 'F1+(tha)', Individual rating at 'C' and Support rating at '2'. The Outlook is Stable.
The ratings are based on UOBT's strong financial position and support from controlling shareholder, United Overseas Bank of Singapore (UOB, 'AA-'/Stable). Any change in the shareholding of UOB in UOBT, or UOB's commitment and support to UOBT could affect its International and National ratings. Meanwhile, any changes in Thailand's Country Ceiling could also affect UOBT as this currently constrains UOBT's foreign currency ratings. The bank's performance remains constrained by its small size and weaker franchise, compared to Thailand's major banks.
UOBT's 2008 performance improved with a reported net profit of THB 1.4bn, compared to a net loss of THB92m in 2007, due to significantly lower loan loss provisions (LLP), improved loan yield and lower funding cost. However, profitability measures remain weaker than major banks due to its weaker loan and deposit franchise. H109 performance has been relatively weak with a net profit of THB394m (a decline of 57% yoy) due to continuing loan contraction and higher provisioning cost.
UOBT's asset quality improved following the sale of THB11bn worth of NPL in Q207, with NPLs falling sharply to THB7.9bn at end-2008 (about 5% of total from 12% at end-2006). However, impaired loans rose to THB8.7bn (6% of total) at end-June 2009 and provisioning risk remains, due to Thailand's continual weak economic environment. Loan loss reserves (LLR) amounted to about THB6bn at end-June 2009, or 69% of impaired loans.
Funding and liquidity position has remained stable. Deposits account for about 90% of funding at end-June 2009, and about 70% of deposits have maturities of less than six months. Loan-to-deposit ratio remains above 90%, while liquid assets to deposits and short-term funding ratios were about 31% at end-June 2009, a rise from 23% at end-2008.
UOBT's capital is the strongest among Thai commercial banks. The bank has recently completed a THB2.2bn capital increase which resulted in Tier 1 capital ratio rising to 20.37% to support future business expansion, and minimise potential ownership dilution in the longer term due to foreign ownership restrictions.
UOBT was established in 1939 as Bank of Asia and was later acquired by Singapore's UOB in 2004. UOBT is Thailand's ninth-largest commercial bank, with 147 branches and 2% of Thailand's total system loans and deposits. The bank's core strength is in SME and retail lending. UOB currently holds 99.66% stake in UOBT.
The ratings are based on UOBT's strong financial position and support from controlling shareholder, United Overseas Bank of Singapore (UOB, 'AA-'/Stable). Any change in the shareholding of UOB in UOBT, or UOB's commitment and support to UOBT could affect its International and National ratings. Meanwhile, any changes in Thailand's Country Ceiling could also affect UOBT as this currently constrains UOBT's foreign currency ratings. The bank's performance remains constrained by its small size and weaker franchise, compared to Thailand's major banks.
UOBT's 2008 performance improved with a reported net profit of THB 1.4bn, compared to a net loss of THB92m in 2007, due to significantly lower loan loss provisions (LLP), improved loan yield and lower funding cost. However, profitability measures remain weaker than major banks due to its weaker loan and deposit franchise. H109 performance has been relatively weak with a net profit of THB394m (a decline of 57% yoy) due to continuing loan contraction and higher provisioning cost.
UOBT's asset quality improved following the sale of THB11bn worth of NPL in Q207, with NPLs falling sharply to THB7.9bn at end-2008 (about 5% of total from 12% at end-2006). However, impaired loans rose to THB8.7bn (6% of total) at end-June 2009 and provisioning risk remains, due to Thailand's continual weak economic environment. Loan loss reserves (LLR) amounted to about THB6bn at end-June 2009, or 69% of impaired loans.
Funding and liquidity position has remained stable. Deposits account for about 90% of funding at end-June 2009, and about 70% of deposits have maturities of less than six months. Loan-to-deposit ratio remains above 90%, while liquid assets to deposits and short-term funding ratios were about 31% at end-June 2009, a rise from 23% at end-2008.
UOBT's capital is the strongest among Thai commercial banks. The bank has recently completed a THB2.2bn capital increase which resulted in Tier 1 capital ratio rising to 20.37% to support future business expansion, and minimise potential ownership dilution in the longer term due to foreign ownership restrictions.
UOBT was established in 1939 as Bank of Asia and was later acquired by Singapore's UOB in 2004. UOBT is Thailand's ninth-largest commercial bank, with 147 branches and 2% of Thailand's total system loans and deposits. The bank's core strength is in SME and retail lending. UOB currently holds 99.66% stake in UOBT.
Fitch Affirms Export-Import Bank of Thailand's Ratings
Fitch Ratings has today affirmed Export-Import Bank of Thailand's (EXIM) Long-term foreign currency Issuer Default Rating (IDR) at 'BBB' with a Stable Outlook, Short-term foreign currency IDR at 'F3', National Long-term rating at 'AAA(tha)' with a Stable Outlook, National Short-term rating at 'F1+(tha), Support rating at '2', Support Rating Floor at 'BBB' and outstanding senior unsecured bonds at 'AAA(tha)'.
EXIM's ratings are correlated with the Sovereign's ratings given the full ownership and control of the bank by the Ministry of Finance (MOF). Also, EXIM's policy role as Thailand's export credit agency, which entitles the bank to partial debt guarantee provisions and loss compensation for business undertaken in accordance with its mandated policy role, links its ratings to that of Thailand's ('BBB'/Stable). Fitch believes that there is a high probability that state support would be forthcoming, if necessary. The International rating and Outlook of EXIM was revised to 'BBB'/Stable from 'BBB+'/Negative in April 2009 following a similar action on Thailand, due to the prolonged political crisis.
Following a strong improvement in financial performance in 2007, EXIM reported a weaker net profit of THB201m in 2008, 60% lower yoy due to increased loan loss provisions (LLP) as a result of higher NPLs amid the weak global economy. Revenue also declined due mainly to loan contraction. EXIM's 9M09 performance has shown improvement with net profit of THB160m, although provisioning risks remains.
The severe global economic downturn in Q408 and Q109 caused a sharp jump in impaired loans. At end-2008, NPLs stood at THB4.7bn (or 9.24% of total loans), a 62% increase from THB2.9bn (5.46%) at end-2007. At end-March 2009, NPLs rose to THB5.3bn (10.84%) but improved to THB4.3bn (9.06%) at end-September 2009 due to restructuring of NPLs. Fitch expects the weak global economic recovery to pose further risks to EXIM's asset quality in 2010.
EXIM's capital position is stronger, with total capital ratio of 23.82% at end-September 2009 compared with 16.63% at end-2008 and 13.05% at end-2007. This is due to the capital injections made by the MOF at end-2008 (THB1.3bn) and in September 2009 (THB5bn). Equity to assets improved to 23.6% at end-September 2009, significantly higher than regional peers.
EXIM began operations in 1994. The bank is under the supervision of the MOF and is subject to examination by the Bank of Thailand (BOT). The bank's main objective is to promote exports, Thai investments abroad and investments for national development. EXIM is not allowed to accept public deposits.
EXIM's ratings are correlated with the Sovereign's ratings given the full ownership and control of the bank by the Ministry of Finance (MOF). Also, EXIM's policy role as Thailand's export credit agency, which entitles the bank to partial debt guarantee provisions and loss compensation for business undertaken in accordance with its mandated policy role, links its ratings to that of Thailand's ('BBB'/Stable). Fitch believes that there is a high probability that state support would be forthcoming, if necessary. The International rating and Outlook of EXIM was revised to 'BBB'/Stable from 'BBB+'/Negative in April 2009 following a similar action on Thailand, due to the prolonged political crisis.
Following a strong improvement in financial performance in 2007, EXIM reported a weaker net profit of THB201m in 2008, 60% lower yoy due to increased loan loss provisions (LLP) as a result of higher NPLs amid the weak global economy. Revenue also declined due mainly to loan contraction. EXIM's 9M09 performance has shown improvement with net profit of THB160m, although provisioning risks remains.
The severe global economic downturn in Q408 and Q109 caused a sharp jump in impaired loans. At end-2008, NPLs stood at THB4.7bn (or 9.24% of total loans), a 62% increase from THB2.9bn (5.46%) at end-2007. At end-March 2009, NPLs rose to THB5.3bn (10.84%) but improved to THB4.3bn (9.06%) at end-September 2009 due to restructuring of NPLs. Fitch expects the weak global economic recovery to pose further risks to EXIM's asset quality in 2010.
EXIM's capital position is stronger, with total capital ratio of 23.82% at end-September 2009 compared with 16.63% at end-2008 and 13.05% at end-2007. This is due to the capital injections made by the MOF at end-2008 (THB1.3bn) and in September 2009 (THB5bn). Equity to assets improved to 23.6% at end-September 2009, significantly higher than regional peers.
EXIM began operations in 1994. The bank is under the supervision of the MOF and is subject to examination by the Bank of Thailand (BOT). The bank's main objective is to promote exports, Thai investments abroad and investments for national development. EXIM is not allowed to accept public deposits.
Subscribe to:
Posts (Atom)