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.
Wednesday, December 16, 2009
Money &Banking to celebrate the 10th Money Expo with the theme “The Road to Wealth”
Money and Banking magazine organizes Money Expo 2010 with special theme “The Road to Wealth” to celebrate its 10th year anniversary and support Thailand economic recovery to distribute wealth to all Thais. The first event, bringing great wealth to Eastern Seaboard, is Money Expo PATTAYA 2010.
Mr.Santi Viriyarangsarit, Money and Banking magazine editor and president of Money Expo 2010 announces that “after its 9 successful years in 2009 with total 5,185,500 visitors and transactions value of 646,000 million baht, Money Expo 2010 will celebrate its 10th anniversary in 2010 in 4 regions in the country with the theme “The Road to Wealth”.
Money Expo brings together best investments and finance offers from nation’s leading commercial banks, financial institutions, along with varied life insurance options available in the market so that retail customers and SMEs can access directly to “funding source” and “Investment Choices”. At the same time, opportunities are opened for Bank and financial institute to expand both retail and SMEs base.
The first Money Expo 2010 The Road to Wealth, the roadmap to achieve wealth for all Thais, will be held in Pattaya of Chonburi province with title “Money Expo Pattaya 2010” during 5-7 February 2010 at PEACH, Royal Cliff Beach Resort Hotel where 22 organizations, including commercial banks, financial institutions together with leading organization from private sector and government agencies will participate.
These organizations will roll out golden promotions for their quality products and services, ranging from low-interest lending rate, special mortgage rate, auto loan, education loan, SMEs loan, credit card, cash card to attractive deposit rates. The best conditions will be offered for investment in stock market, bonds, derivatives, life insurance. Meanwhile, investment guidance and consultancy services will also be provided to those interested. Moreover, liveStage performances from leading superstars are scheduled to entertain visitors.
Commercial banks participate in Money Expo PATTAYA 2010 are Krung Thai Bank Pcl. , Bangkok Bank Pcl. , Kasikorn Bank Pcl. , Siam Commercial Bank Pcl. , Bank of Ayudhya Pcl. , TMB Bank Pcl. , The Siam City Bank Pcl. , CIMB Thai Bank Pcl. , The Thai Credit Retail Bank Pcl. , Commercial banks participate Government Housing Bank , Islamic Bank of Thailand , Muang Thai Life Assurance Co. Ltd. , Ayudhya Capital Auto Lease Plc. , AEON Thana Sinsap (Thailand) Pcl. , Asia Forestry Management Co., Ltd. , Profitable Group , Bank of Thailand , The Revenue Department , The Stock Exchange of Thailand , Securities and Exchange Commission , Office of Insurance Commission and The Agriculture Futures Exchange of Thailand
Chonburi province is the economic, commercial and tourism center of the East given purchasing power of 1.2 million population. At the end of 2008, Gross Provincial Product (GPP) stood at 492,051 million baht, rose by 38,165 million baht from end 2007, while GDP per Capita was 416,003 baht, increase by 27,829 million baht from the end of 2007.
As of September 30, 2009, Chonburi shelters 280 of Banks’ branches. All of which provided 153,324 million baht net credits and raised 191,457 million baht net deposits. From January to October 2009, there are 35 projects applied for investment privileges from BOI.
In addition, there are positive signs of economic recovery given the revised 2010 GDP growth forecast to 3.3 to 5.3% from previous 3.0 to 3.5% by the The Bank of Thailand.
“All indicators show that there are strong demand for loans in Chonburi and the whole Eastern region and consumers still look for better yields in deposits and investment. I’m confident that Money Expo PATTAYA 2010 will again succeed as highly as the first Money Expo PATTAYA held during 6-8 February 2009 that has attracted 45,000 visitors and generated 19,213.68 million baht worth of transactions” Mr.Santi said.
Three other Money Expo 2010
Central - Money Expo 2010 at Queen Sirikit National Convention Center, 6-9 May 2010
North Eastern - Money Expo KORAT 2010 at MCC Hall, The Mall Korat, 8-10 October 2010
North - Money Expo Chiangmai 2010 at Chiangmai University Convention Center, 12-14 November 2010
Mr.Santi Viriyarangsarit, Money and Banking magazine editor and president of Money Expo 2010 announces that “after its 9 successful years in 2009 with total 5,185,500 visitors and transactions value of 646,000 million baht, Money Expo 2010 will celebrate its 10th anniversary in 2010 in 4 regions in the country with the theme “The Road to Wealth”.
Money Expo brings together best investments and finance offers from nation’s leading commercial banks, financial institutions, along with varied life insurance options available in the market so that retail customers and SMEs can access directly to “funding source” and “Investment Choices”. At the same time, opportunities are opened for Bank and financial institute to expand both retail and SMEs base.
The first Money Expo 2010 The Road to Wealth, the roadmap to achieve wealth for all Thais, will be held in Pattaya of Chonburi province with title “Money Expo Pattaya 2010” during 5-7 February 2010 at PEACH, Royal Cliff Beach Resort Hotel where 22 organizations, including commercial banks, financial institutions together with leading organization from private sector and government agencies will participate.
These organizations will roll out golden promotions for their quality products and services, ranging from low-interest lending rate, special mortgage rate, auto loan, education loan, SMEs loan, credit card, cash card to attractive deposit rates. The best conditions will be offered for investment in stock market, bonds, derivatives, life insurance. Meanwhile, investment guidance and consultancy services will also be provided to those interested. Moreover, liveStage performances from leading superstars are scheduled to entertain visitors.
Commercial banks participate in Money Expo PATTAYA 2010 are Krung Thai Bank Pcl. , Bangkok Bank Pcl. , Kasikorn Bank Pcl. , Siam Commercial Bank Pcl. , Bank of Ayudhya Pcl. , TMB Bank Pcl. , The Siam City Bank Pcl. , CIMB Thai Bank Pcl. , The Thai Credit Retail Bank Pcl. , Commercial banks participate Government Housing Bank , Islamic Bank of Thailand , Muang Thai Life Assurance Co. Ltd. , Ayudhya Capital Auto Lease Plc. , AEON Thana Sinsap (Thailand) Pcl. , Asia Forestry Management Co., Ltd. , Profitable Group , Bank of Thailand , The Revenue Department , The Stock Exchange of Thailand , Securities and Exchange Commission , Office of Insurance Commission and The Agriculture Futures Exchange of Thailand
Chonburi province is the economic, commercial and tourism center of the East given purchasing power of 1.2 million population. At the end of 2008, Gross Provincial Product (GPP) stood at 492,051 million baht, rose by 38,165 million baht from end 2007, while GDP per Capita was 416,003 baht, increase by 27,829 million baht from the end of 2007.
As of September 30, 2009, Chonburi shelters 280 of Banks’ branches. All of which provided 153,324 million baht net credits and raised 191,457 million baht net deposits. From January to October 2009, there are 35 projects applied for investment privileges from BOI.
In addition, there are positive signs of economic recovery given the revised 2010 GDP growth forecast to 3.3 to 5.3% from previous 3.0 to 3.5% by the The Bank of Thailand.
“All indicators show that there are strong demand for loans in Chonburi and the whole Eastern region and consumers still look for better yields in deposits and investment. I’m confident that Money Expo PATTAYA 2010 will again succeed as highly as the first Money Expo PATTAYA held during 6-8 February 2009 that has attracted 45,000 visitors and generated 19,213.68 million baht worth of transactions” Mr.Santi said.
Three other Money Expo 2010
Central - Money Expo 2010 at Queen Sirikit National Convention Center, 6-9 May 2010
North Eastern - Money Expo KORAT 2010 at MCC Hall, The Mall Korat, 8-10 October 2010
North - Money Expo Chiangmai 2010 at Chiangmai University Convention Center, 12-14 November 2010
New Generation Trading System for China Foreign Exchange Trade System (CFETS) goes live nationwide
Tata Consultancy Services, the leading IT services, business solutions and outsourcing firm today announced that the Reminbi currency trading platform for the Chinese inter-bank market, an initiative of China Foreign Exchange Trade System (CFETS), a subsidiary of People’s Bank of China (PBoC) has successfully gone live nationwide. The New Generation CNY Trading System (NGCNYTS) is a forward-looking trading system, which aims to incorporate the future vision of the Chinese Interbank market and relevant international best practices. It is designed to meet the fast growing requirements of the Chinese financial market with efficient risk management and real time monitoring systems. It supports multiple trading methods, including special features for market makers.
NGCNYTS is a next generation system providing unified platform across Debt, Money and Derivative Markets. NGCNYTS gained national importance, as it is the primary trading platform for all financial institutions such as Commercial Banks, Pension, Trust & Mutual Fund, Securities firms and Insurance companies in China.
Speaking on the successful implementation of this landmark project, Girija Pande, Executive Vice President and Head, TCS Asia Pacific, said, “We are extremely pleased to successfully deliver the CFETS project built based on our experience in other global markets and in close cooperation with CFETS who have experience in Chinese domestic market. It also provides flexibility to connect with third party front ends and other external interfaces. Deploying in ten markets at a time is a unique challenge which TCS could complete successfully.”
“The project is among the most prestigious venture of TCS in the APAC region, involving a highly dedicated multi-cultural team of over 130 associates spanning a period of more than 2 years. The team will be maintaining the system going forward and enhancing the system for additional markets,” he further added.
TCS’ trading solution at CFETS is scalable and can handle rapid growth in volumes with ease. Due to its scalable and configurable architecture, it also simplifies the addition of multiple financial products thus reducing the overall time to market.
Besides CFETS, TCS has successfully delivered the mission critical trading systems for the National Stock Exchange of India Limited, India, National Commodity and Derivatives Exchange, India and Clearing Corporation of India Limited (CCIL). TCS is also the chosen strategic partner involved in maintaining the trading applications at Deutsche Boerse AG, Germany.
TCS pioneered the entry of Indian IT industry in China in 2002 and remains at the forefront of that thrust with 1100 consultants in China and four Global delivery Centres (Beijing, Shanghai, Tianjin& Hangzhou). In 2005, TCS was invited by Chinese Government to form a Joint Venture to create a large scale global sourcing base in China. TCS China is serving over 30 Global and domestic clients like Eaton, Motorola, Cummins, China Foreign Exchange Trade System (CFETS), Guangdong Provincial Rural Credit Cooperative Union (GDRCC), China Trust Bank, Hua Xia Bank.
NGCNYTS is a next generation system providing unified platform across Debt, Money and Derivative Markets. NGCNYTS gained national importance, as it is the primary trading platform for all financial institutions such as Commercial Banks, Pension, Trust & Mutual Fund, Securities firms and Insurance companies in China.
Speaking on the successful implementation of this landmark project, Girija Pande, Executive Vice President and Head, TCS Asia Pacific, said, “We are extremely pleased to successfully deliver the CFETS project built based on our experience in other global markets and in close cooperation with CFETS who have experience in Chinese domestic market. It also provides flexibility to connect with third party front ends and other external interfaces. Deploying in ten markets at a time is a unique challenge which TCS could complete successfully.”
“The project is among the most prestigious venture of TCS in the APAC region, involving a highly dedicated multi-cultural team of over 130 associates spanning a period of more than 2 years. The team will be maintaining the system going forward and enhancing the system for additional markets,” he further added.
TCS’ trading solution at CFETS is scalable and can handle rapid growth in volumes with ease. Due to its scalable and configurable architecture, it also simplifies the addition of multiple financial products thus reducing the overall time to market.
Besides CFETS, TCS has successfully delivered the mission critical trading systems for the National Stock Exchange of India Limited, India, National Commodity and Derivatives Exchange, India and Clearing Corporation of India Limited (CCIL). TCS is also the chosen strategic partner involved in maintaining the trading applications at Deutsche Boerse AG, Germany.
TCS pioneered the entry of Indian IT industry in China in 2002 and remains at the forefront of that thrust with 1100 consultants in China and four Global delivery Centres (Beijing, Shanghai, Tianjin& Hangzhou). In 2005, TCS was invited by Chinese Government to form a Joint Venture to create a large scale global sourcing base in China. TCS China is serving over 30 Global and domestic clients like Eaton, Motorola, Cummins, China Foreign Exchange Trade System (CFETS), Guangdong Provincial Rural Credit Cooperative Union (GDRCC), China Trust Bank, Hua Xia Bank.
Euroclear Bank to automate syndicated loan settlement
Euroclear Bank announces the industry’s first and only multi-currency, delivery-versus-payment (DvP) settlement service for secondary market trades in syndicated loans. Launch of the new LoanReach feature will take place in the first quarter of 2010. The new, automated DvP settlement service fills a major efficiency gap in the syndicated loan business, reducing costs and risks for secondary market loan trading. DvP settlement means that the cash and loan components of the trade will be exchanged simultaneously, unlike today where movements of loan positions and cash occur manually and asynchronously. DvP settlement is the industry standard for trades in most other asset classes, such as equities and bonds.
Euroclear Bank’s extended LoanReach service will eliminate most of the credit and settlement risks, and substantially reduce the counterparty risks, associated with the settlement of syndicated loans.
Furthermore, Euroclear Bank’s initiative aims to significantly shorten the length of the settlement cycle. Today, syndicated loan transactions settle on a T+20-25 basis. Euroclear Bank’s service targets the benchmarks set by the Loan Market Association (LMA) and the Loan Syndications and Trading Association (LSTA) of T+10 and T+7, respectively, for conventional trades. Shorter settlement cycles will reduce counterparty default risk and increase liquidity.
Jurgen De Weghe, Director, LoanReach Product Management, said: “We are proud to deliver the benefits of automation and standardisation to syndicated loan investors. In close collaboration with agent banks, the introduction of multi-currency trade matching and DvP settlement is critical in this cost- and risk-conscious environment. Euroclear Bank’s LoanReach service is the most comprehensive in the market, with more features, such as E-messaging and collateral management, to come in the near future.”
"We strongly support the development of market platforms for syndicated loans,” said Martin Lelong, Project Director at Société Générale Corporate & Investment Banking (SGCIB). “We are particularly interested by Euroclear’s announcement, as their service offer fits very well with the specificities of the European market, which is of key importance to us: a tool working seamlessly and with all major currencies from trade matching to final settlement. We are convinced that these types of solutions will bring operational risk reductions, increased liquidity and productivity gains to the whole sector."
LoanReach was launched in June 2008, offering a service to allocate unique identification codes for syndicated loans, a centralised loan database, as well as agent and lender portfolio reporting systems.
With the launch of its second phase in September 2008, LoanReach introduced a portfolio reconciliation service enabling lenders to reduce their operational workload by reconciling their portfolios against balances uploaded by their agents in the centralised loan database maintained by Euroclear Bank. This service feature significantly reduces the number of reconciliation failures between agents and lenders, resulting in more efficient and accurate processing of cash-related operations, such as interest payments.
Euroclear Bank’s extended LoanReach service will eliminate most of the credit and settlement risks, and substantially reduce the counterparty risks, associated with the settlement of syndicated loans.
Furthermore, Euroclear Bank’s initiative aims to significantly shorten the length of the settlement cycle. Today, syndicated loan transactions settle on a T+20-25 basis. Euroclear Bank’s service targets the benchmarks set by the Loan Market Association (LMA) and the Loan Syndications and Trading Association (LSTA) of T+10 and T+7, respectively, for conventional trades. Shorter settlement cycles will reduce counterparty default risk and increase liquidity.
Jurgen De Weghe, Director, LoanReach Product Management, said: “We are proud to deliver the benefits of automation and standardisation to syndicated loan investors. In close collaboration with agent banks, the introduction of multi-currency trade matching and DvP settlement is critical in this cost- and risk-conscious environment. Euroclear Bank’s LoanReach service is the most comprehensive in the market, with more features, such as E-messaging and collateral management, to come in the near future.”
"We strongly support the development of market platforms for syndicated loans,” said Martin Lelong, Project Director at Société Générale Corporate & Investment Banking (SGCIB). “We are particularly interested by Euroclear’s announcement, as their service offer fits very well with the specificities of the European market, which is of key importance to us: a tool working seamlessly and with all major currencies from trade matching to final settlement. We are convinced that these types of solutions will bring operational risk reductions, increased liquidity and productivity gains to the whole sector."
LoanReach was launched in June 2008, offering a service to allocate unique identification codes for syndicated loans, a centralised loan database, as well as agent and lender portfolio reporting systems.
With the launch of its second phase in September 2008, LoanReach introduced a portfolio reconciliation service enabling lenders to reduce their operational workload by reconciling their portfolios against balances uploaded by their agents in the centralised loan database maintained by Euroclear Bank. This service feature significantly reduces the number of reconciliation failures between agents and lenders, resulting in more efficient and accurate processing of cash-related operations, such as interest payments.
Tuesday, December 15, 2009
Citi mandated to raise first syndicated SME financing for a microfinance institution
Citibank, N.A., Dhaka Branch today announced that it has been mandated for the country’s maiden syndicated facility of up to BDT 2 billion (US$29 million) to provide financing for small and medium enterprises (SMEs). This local currency facility will be for BURO Bangladesh, a leading microfinance institution and SME-financing NGO (non-government organization) in Bangladesh. The facility will be utilized by BURO to make credit available to SMEs, especially in rural and semi urban areas. SME financing is a priority area for Citi in Bangladesh and Citi is committed to further participating in the development of the sector.
“This Citi-led initiative is aligned with the Bangladesh Bank’s [the Central Bank of Bangladesh] objective to promote the development of the SME market. We are honoured to have this opportunity to support BURO. Once closed, this deal will provide long-term, local-currency solutions to BURO for the expansion of its SME portfolio,” said Mamun Rashid, Citi Country Officer Bangladesh. The transaction is expected to close in the first quarter of 2010.
This transaction is a follow-on to a recent transaction where Citi Bangladesh successfully closed the country’s first ever syndicated agricultural term facility of BDT1.5 billion (or US$21.7 million) to BURO Bangladesh, to support its expansion of micro-lending to the agriculture sector.
“We'll expedite our SME financing programs across the country using such funds," said Zakir Hossain, Executive Director of BURO, adding that the agency is now running their SME programs in four divisions including Dhaka.
Established in 1990, BURO Bangladesh serves more than 700,000 customers, of which more than 99% are women. BURO has a presence in 51 districts of Bangladesh through over 400 branches. As part of its 2009-2013 expansion program, BURO has plans to open 215 new branches covering 1.65 million total customers.
“This Citi-led initiative is aligned with the Bangladesh Bank’s [the Central Bank of Bangladesh] objective to promote the development of the SME market. We are honoured to have this opportunity to support BURO. Once closed, this deal will provide long-term, local-currency solutions to BURO for the expansion of its SME portfolio,” said Mamun Rashid, Citi Country Officer Bangladesh. The transaction is expected to close in the first quarter of 2010.
This transaction is a follow-on to a recent transaction where Citi Bangladesh successfully closed the country’s first ever syndicated agricultural term facility of BDT1.5 billion (or US$21.7 million) to BURO Bangladesh, to support its expansion of micro-lending to the agriculture sector.
“We'll expedite our SME financing programs across the country using such funds," said Zakir Hossain, Executive Director of BURO, adding that the agency is now running their SME programs in four divisions including Dhaka.
Established in 1990, BURO Bangladesh serves more than 700,000 customers, of which more than 99% are women. BURO has a presence in 51 districts of Bangladesh through over 400 branches. As part of its 2009-2013 expansion program, BURO has plans to open 215 new branches covering 1.65 million total customers.
Thai SMBs Take the ‘Hero’ Approach to Running Their Business
PayPal survey reveals that Thai SMBs rank creativity and imagination as top start-up skills
Thailand, 14 December 2009 – According to a regional PayPal study released today, when it comes to the way Thai SMBs conduct business, more than a fifth (21 percent) liken themselves to ‘heroes’ – committed to meeting any challenge before them and leading their business through all types of conditions.
Keys to success
Over a third (32 percent) of Thai SMBs consider creativity and imagination as the most important skill when starting your own company, followed by self-confidence (30 percent) and industry expertise (30 (percent).
The Internet is also playing an increasingly important role in the success of Thai SMBs, with over a third (37 percent) of annual turnover derived from online sales, equating to US $182,000. Global reach, additional sales revenues and staying ahead of the times were cited as the top three drivers for going online. Currently, 66 percent of Indian SMBs have a company website and 52 percent are engaging in e-commerce activities such as offering online orders (89 percent), online payment (56 percent) and online delivery (9 percent).
Potential roadblocks
Almost three quarters (73 percent) of the SMBs surveyed in Thailand intend to grow their business steadily in the next two to three years. However, they are encountering some challenges in meeting their goal. Forty-seven percent are concerned about surviving the current global downturn, 43 percent are facing increasing competition in their industry and 37 percent are having trouble building an online business.
Thai SMBs see e-commerce as one way to overcome those roadblocks and believe it will provide an additional avenue for more sales (71 percent), help them to increase global reach (53 percent) and keep up with the times (51 percent).
The future looks bright
The average annual sales turnover for SMBs in Thailand is currently US$492,200 and the majority of Thai SMBs (80 percent) are either very or quite optimistic about business growth in the next 12 months, with more than 2 in 5 looking at up to 20 percent growth. With over 1.6 billion Internet users worldwide, it is clear that e-commerce will play a very important role in Indian SMBs achieving that growth.
“Our research shows that Thai SMBs clearly recognise the value of ecommerce with the highest proportion (over 50 percent) across the four countries surveyed already engaged in ecommerce activities,” said Mario Shiliashki, General Manager of PayPal Southeast Asia and India. “Convenience, security and minimal set-up costs will help Thai SMBs to overcome their current roadblocks and satisfy their desire to grow internationally and drive additional sales revenues. With over eleven years of experience connecting buyers and sellers across the globe, we offer merchants a cost-effective, convenient and secure way to get started online and grow their business. Plus, research has shown that SMBs can receive an average sales increase of 14 percent when they add PayPal to their site. ”
About PayPal
PayPal is the faster, safer way to pay and get paid online. The service allows members to send and receive payments without disclosing financial information, with the flexibility to pay or get paid using a variety of secure payment options, including account balances, bank accounts (in approved countries), credit cards or promotional financing. With more than 78 million active accounts in 190 markets and 24 currencies around the world, PayPal enables global ecommerce.
In the U.S., PayPal is the most preferred payment service on the Web after Visa. In the UK and Australia, PayPal is the most preferred payment service on the Web .
PayPal’s Total Payment Volume, the total value of transactions in 2008 represented nearly 9 percent of global e-commerce .
PayPal is headquartered in San Jose, California. Its international headquarters (PayPal Pte. Ltd.) is located in Singapore.
PayPal is an eBay company. More information about the company can be found at www.paypal.com
Consumer advisory - PayPal Pte. Ltd., the holder of PayPal's stored value facility, does not require the approval of the Monetary Authority of Singapore. Users are advised to read the terms and conditions available at www.paypal.com carefully before use.
About the survey
The PayPal survey was conducted by BlackBox in August and September 2009 in India, Singapore, Malaysia, and Thailand. In each country, 300 small-medium businesses (SMB) with 5 to 50 staff and either an existing ecommerce site or plans to implement one in the next 12 months were surveyed. Respondents were either SMB owners, decision-makers or managers with financial authority or influence.
Thailand, 14 December 2009 – According to a regional PayPal study released today, when it comes to the way Thai SMBs conduct business, more than a fifth (21 percent) liken themselves to ‘heroes’ – committed to meeting any challenge before them and leading their business through all types of conditions.
Keys to success
Over a third (32 percent) of Thai SMBs consider creativity and imagination as the most important skill when starting your own company, followed by self-confidence (30 percent) and industry expertise (30 (percent).
The Internet is also playing an increasingly important role in the success of Thai SMBs, with over a third (37 percent) of annual turnover derived from online sales, equating to US $182,000. Global reach, additional sales revenues and staying ahead of the times were cited as the top three drivers for going online. Currently, 66 percent of Indian SMBs have a company website and 52 percent are engaging in e-commerce activities such as offering online orders (89 percent), online payment (56 percent) and online delivery (9 percent).
Potential roadblocks
Almost three quarters (73 percent) of the SMBs surveyed in Thailand intend to grow their business steadily in the next two to three years. However, they are encountering some challenges in meeting their goal. Forty-seven percent are concerned about surviving the current global downturn, 43 percent are facing increasing competition in their industry and 37 percent are having trouble building an online business.
Thai SMBs see e-commerce as one way to overcome those roadblocks and believe it will provide an additional avenue for more sales (71 percent), help them to increase global reach (53 percent) and keep up with the times (51 percent).
The future looks bright
The average annual sales turnover for SMBs in Thailand is currently US$492,200 and the majority of Thai SMBs (80 percent) are either very or quite optimistic about business growth in the next 12 months, with more than 2 in 5 looking at up to 20 percent growth. With over 1.6 billion Internet users worldwide, it is clear that e-commerce will play a very important role in Indian SMBs achieving that growth.
“Our research shows that Thai SMBs clearly recognise the value of ecommerce with the highest proportion (over 50 percent) across the four countries surveyed already engaged in ecommerce activities,” said Mario Shiliashki, General Manager of PayPal Southeast Asia and India. “Convenience, security and minimal set-up costs will help Thai SMBs to overcome their current roadblocks and satisfy their desire to grow internationally and drive additional sales revenues. With over eleven years of experience connecting buyers and sellers across the globe, we offer merchants a cost-effective, convenient and secure way to get started online and grow their business. Plus, research has shown that SMBs can receive an average sales increase of 14 percent when they add PayPal to their site. ”
About PayPal
PayPal is the faster, safer way to pay and get paid online. The service allows members to send and receive payments without disclosing financial information, with the flexibility to pay or get paid using a variety of secure payment options, including account balances, bank accounts (in approved countries), credit cards or promotional financing. With more than 78 million active accounts in 190 markets and 24 currencies around the world, PayPal enables global ecommerce.
In the U.S., PayPal is the most preferred payment service on the Web after Visa. In the UK and Australia, PayPal is the most preferred payment service on the Web .
PayPal’s Total Payment Volume, the total value of transactions in 2008 represented nearly 9 percent of global e-commerce .
PayPal is headquartered in San Jose, California. Its international headquarters (PayPal Pte. Ltd.) is located in Singapore.
PayPal is an eBay company. More information about the company can be found at www.paypal.com
Consumer advisory - PayPal Pte. Ltd., the holder of PayPal's stored value facility, does not require the approval of the Monetary Authority of Singapore. Users are advised to read the terms and conditions available at www.paypal.com carefully before use.
About the survey
The PayPal survey was conducted by BlackBox in August and September 2009 in India, Singapore, Malaysia, and Thailand. In each country, 300 small-medium businesses (SMB) with 5 to 50 staff and either an existing ecommerce site or plans to implement one in the next 12 months were surveyed. Respondents were either SMB owners, decision-makers or managers with financial authority or influence.
Saturday, November 21, 2009
The Financial Sector Master Plan Phase II
The Economic Cabinet approved the Financial Sector Master Plan Phase II (FSMP Phase II), jointly proposed by the Ministry of Finance (MOF) and the Bank of Thailand (BOT), reflecting the importance placed on the setting of goals and strategic direction for continuous development of financial institutions system. The FSMP Phase II is to be implemented during 2010 – 2014, following the implementation of the FSMP Phase I during 2004 – 2008.
The FSMP Phase II aims to enhance the efficiency of the financial institutions system, thereby enabling financial institutions to perform their financial intermediation role more efficiently, become more competitive, be able to serve a broader group of households and businesses, and maintain resiliency in face of the fast-changing environment. With greater efficiency, the financing cost of individuals and businesses would decline while the economy would be more competitive. Key measures of the FSMP Phase II can be summarized under 3 pillars: 1) reduce system-wide operating cost; 2) promote competition and financial access; and 3) strengthen financial infrastructure, with details as follows:
1. Reduce system-wide operating cost to enhance management efficiency of financial institutions, which would translate to lower costs of providing services to consumers and improved ability to compete with foreign competitors. Important measures include the followings:
1.1 Reduce regulatory costs that affect operating costs and opportunity costs for financial institutions. Improvement in financial institutions regulations is still based on the key principle that such rationalisation of regulation would promote efficiency and lower costs, without compromising stability and soundness of financial institutions and the economy as well as consumer rights.
1.2 Reduce costs from remaining NPL and NPA. Important measures include tax measures and enhancement in demand for NPA by allowing banks to partner with private firms to work on increasing the attractiveness of foreclosed immovable properties. The efficiency in trading of NPA would also be promoted by establishing an NPA information centre, and fostering an effective mechanism for foreclosure and subrogation by buyers.
2. Promote competition and financial access through various measures such as introducing new service providers into the system, expanding the scope of business of existing service providers to induce greater competition in price and service quality, and fostering greater opportunity for all sectors of the economy to access financial services from the financial institutions system. Such measures would enhance the efficiency of the overall economy. Salient features include the followings:
2.1 Promote competition within the financial institutions system by setting policies based on the following 5 principles:
1) Build a financial institutions system that provides strong and resilient support for the economy under all scenarios.
2) Encourage financial institutions to become larger through voluntary mergers while having in place measures to prevent anti-competitive behaviour to safeguard fair consumer treatment. As a result, there would be gain from economy of scale and scope, thereby lifting competitiveness of the Thai financial institutions system.
3) Promote competition by enabling financial institutions to be more flexible in managing their branch network and business scope, thus enhancing the role of existing service providers. Moreover, new service providers would be introduced in order to further increase competition, thereby raising the efficiency of the financial institutions system.
4) Allow new service providers into the financial institutions system regardless of nationality while still preserving the One Presence rule. Emphasis would be placed on new service providers with the ability to fill gaps within the system in order to enhance the efficiency and stability of the financial institutions system, in line with the trend of Thailand’s international trade and investment. Approval would be on a case-by-case basis and consideration by the MOF and the BOT would be based on appropriateness for the Thai financial institutions system.
5) Support the role of Specialized Financial Institutions (SFIs) in focusing on providing financial services to low-income population and micro businesses that do not have access to services provided by commercial banks. Government ownership in the commercial banking system after the crisis in 1997 would also be reduced.
2.2 Promote financial access to various groups of the population so as to better suit their needs at a more reasonable price, especially for micro businesses and low-income individuals. There would be measures to encourage private financial institutions to adopt business models suitable to serve the population groups that currently lack the opportunity to access financial services. For example, new entry would be permitted for service providers with expertise and proven success in microfinance. In this connection, the MOF and the BOT would consider new licenses on a case-by-case basis, subjected to rules and conditions stipulated. Meanwhile, there would be measures to support the role of the government and SFIs in filling the gaps left open by commercial service providers.
3. Strengthen financial infrastructure. Efficient and more complete financial infrastructure is an important prerequisite for enhancing efficiency of the financial institutions system. Among the key infrastructures for financial institutions are those relating to the lending mechanism, which is the main business of financial institutions. Under the FSMP Phase II, there are 5 areas of financial infrastructure improvement.
3.1 Enhance the capability and tools for risk management of financial institutions, including for credit, market, liquidity, and settlement risks, in response to financial system and economic development.
3.2 Improve the information system to support risk management of financial institutions, as well as facilitate their strategic planning and service expansion. Such improvements would include capacity enhancement of the National Credit Bureau and exploring development of a data pooling system, with due consideration for appropriate protection of client confidentiality.
3.3 Review financial laws that support risk management of financial institutions with regard to lending and managing NPA, including: 1) the secured transaction law; 2) the foreclosure law; and 3) the bankruptcy law. The review aims to establish the necessary legal infrastructure that is conducive to risk management of financial institutions while providing individuals and small businesses with potential better opportunities for improved access to the business restructuring process.
3.4 Promote greater efficiency in the use of information technology (IT) and reduce cost of providing financial services. This measure aims to support more efficient use of IT and review of related supervisory standards to ensure security of such services to enhance confidence of users.
3.5 Enhance the capacity of human resource in the financial institutions system by improving the skills and expertise of staff, enhancing the role of the Thai Institute of Banking and Finance Association and encouraging financial institutions to set clear policies on staff training and development.
The MOF and the BOT anticipate that implementation of the FSMP II would benefit individuals, businesses, the financial institutions system and the country as a whole, in the following ways.
1) An efficient financial institutions system, with good risk management and corporate governance, that is strong, not burdensome for the country, and supportive of economic development in both normal and crisis scenarios.
2) Reduction in costs of services provided by financial institutions, that would help raise income of Thai people and lower operating costs of the private sector, thus increasing the country’s competitiveness.
3) Improving access for users to a broad range of financial services that is appropriate for their needs, especially through the promotion of microfinance to help reduce burden from resorting to informal market.
4) Strengthening of grass-root communities through knowledge sharing between successful microfinance experts and local grass-root micro institutions, which would lead to greater financial strength and financial immunity for all groups of the Thai society.
5) Creation of opportunities for improved access to the business restructuring process for individual debtors and small business debtors with potential, thereby enabling the continuation of their businesses and safeguarding value-added for the overall economy.
6) Infrastructure for the financial system that is conducive to risk management of financial institutions, enabling them to deal with remaining non-performing loans and assets more effectively, and thus leading to lower operating costs and greater readiness to serve customers.
After the principles stipulated in the FSMP Phase II have been approved, the FSMP Phase II Implementation Committee, chaired by the Minister of Finance, would be formed to oversee the implementation of the Plan.
In this regard, the BOT would arrange for a hearing with all financial institutions in November, this year.
The FSMP Phase II aims to enhance the efficiency of the financial institutions system, thereby enabling financial institutions to perform their financial intermediation role more efficiently, become more competitive, be able to serve a broader group of households and businesses, and maintain resiliency in face of the fast-changing environment. With greater efficiency, the financing cost of individuals and businesses would decline while the economy would be more competitive. Key measures of the FSMP Phase II can be summarized under 3 pillars: 1) reduce system-wide operating cost; 2) promote competition and financial access; and 3) strengthen financial infrastructure, with details as follows:
1. Reduce system-wide operating cost to enhance management efficiency of financial institutions, which would translate to lower costs of providing services to consumers and improved ability to compete with foreign competitors. Important measures include the followings:
1.1 Reduce regulatory costs that affect operating costs and opportunity costs for financial institutions. Improvement in financial institutions regulations is still based on the key principle that such rationalisation of regulation would promote efficiency and lower costs, without compromising stability and soundness of financial institutions and the economy as well as consumer rights.
1.2 Reduce costs from remaining NPL and NPA. Important measures include tax measures and enhancement in demand for NPA by allowing banks to partner with private firms to work on increasing the attractiveness of foreclosed immovable properties. The efficiency in trading of NPA would also be promoted by establishing an NPA information centre, and fostering an effective mechanism for foreclosure and subrogation by buyers.
2. Promote competition and financial access through various measures such as introducing new service providers into the system, expanding the scope of business of existing service providers to induce greater competition in price and service quality, and fostering greater opportunity for all sectors of the economy to access financial services from the financial institutions system. Such measures would enhance the efficiency of the overall economy. Salient features include the followings:
2.1 Promote competition within the financial institutions system by setting policies based on the following 5 principles:
1) Build a financial institutions system that provides strong and resilient support for the economy under all scenarios.
2) Encourage financial institutions to become larger through voluntary mergers while having in place measures to prevent anti-competitive behaviour to safeguard fair consumer treatment. As a result, there would be gain from economy of scale and scope, thereby lifting competitiveness of the Thai financial institutions system.
3) Promote competition by enabling financial institutions to be more flexible in managing their branch network and business scope, thus enhancing the role of existing service providers. Moreover, new service providers would be introduced in order to further increase competition, thereby raising the efficiency of the financial institutions system.
4) Allow new service providers into the financial institutions system regardless of nationality while still preserving the One Presence rule. Emphasis would be placed on new service providers with the ability to fill gaps within the system in order to enhance the efficiency and stability of the financial institutions system, in line with the trend of Thailand’s international trade and investment. Approval would be on a case-by-case basis and consideration by the MOF and the BOT would be based on appropriateness for the Thai financial institutions system.
5) Support the role of Specialized Financial Institutions (SFIs) in focusing on providing financial services to low-income population and micro businesses that do not have access to services provided by commercial banks. Government ownership in the commercial banking system after the crisis in 1997 would also be reduced.
2.2 Promote financial access to various groups of the population so as to better suit their needs at a more reasonable price, especially for micro businesses and low-income individuals. There would be measures to encourage private financial institutions to adopt business models suitable to serve the population groups that currently lack the opportunity to access financial services. For example, new entry would be permitted for service providers with expertise and proven success in microfinance. In this connection, the MOF and the BOT would consider new licenses on a case-by-case basis, subjected to rules and conditions stipulated. Meanwhile, there would be measures to support the role of the government and SFIs in filling the gaps left open by commercial service providers.
3. Strengthen financial infrastructure. Efficient and more complete financial infrastructure is an important prerequisite for enhancing efficiency of the financial institutions system. Among the key infrastructures for financial institutions are those relating to the lending mechanism, which is the main business of financial institutions. Under the FSMP Phase II, there are 5 areas of financial infrastructure improvement.
3.1 Enhance the capability and tools for risk management of financial institutions, including for credit, market, liquidity, and settlement risks, in response to financial system and economic development.
3.2 Improve the information system to support risk management of financial institutions, as well as facilitate their strategic planning and service expansion. Such improvements would include capacity enhancement of the National Credit Bureau and exploring development of a data pooling system, with due consideration for appropriate protection of client confidentiality.
3.3 Review financial laws that support risk management of financial institutions with regard to lending and managing NPA, including: 1) the secured transaction law; 2) the foreclosure law; and 3) the bankruptcy law. The review aims to establish the necessary legal infrastructure that is conducive to risk management of financial institutions while providing individuals and small businesses with potential better opportunities for improved access to the business restructuring process.
3.4 Promote greater efficiency in the use of information technology (IT) and reduce cost of providing financial services. This measure aims to support more efficient use of IT and review of related supervisory standards to ensure security of such services to enhance confidence of users.
3.5 Enhance the capacity of human resource in the financial institutions system by improving the skills and expertise of staff, enhancing the role of the Thai Institute of Banking and Finance Association and encouraging financial institutions to set clear policies on staff training and development.
The MOF and the BOT anticipate that implementation of the FSMP II would benefit individuals, businesses, the financial institutions system and the country as a whole, in the following ways.
1) An efficient financial institutions system, with good risk management and corporate governance, that is strong, not burdensome for the country, and supportive of economic development in both normal and crisis scenarios.
2) Reduction in costs of services provided by financial institutions, that would help raise income of Thai people and lower operating costs of the private sector, thus increasing the country’s competitiveness.
3) Improving access for users to a broad range of financial services that is appropriate for their needs, especially through the promotion of microfinance to help reduce burden from resorting to informal market.
4) Strengthening of grass-root communities through knowledge sharing between successful microfinance experts and local grass-root micro institutions, which would lead to greater financial strength and financial immunity for all groups of the Thai society.
5) Creation of opportunities for improved access to the business restructuring process for individual debtors and small business debtors with potential, thereby enabling the continuation of their businesses and safeguarding value-added for the overall economy.
6) Infrastructure for the financial system that is conducive to risk management of financial institutions, enabling them to deal with remaining non-performing loans and assets more effectively, and thus leading to lower operating costs and greater readiness to serve customers.
After the principles stipulated in the FSMP Phase II have been approved, the FSMP Phase II Implementation Committee, chaired by the Minister of Finance, would be formed to oversee the implementation of the Plan.
In this regard, the BOT would arrange for a hearing with all financial institutions in November, this year.
Friday, November 13, 2009
POPULAR LONG-TERM CORPORATE BONDS ARE LICENSED TO SELL
One result of the past year's financial turmoil has been much greater corporate bond issuance in Thailand.
Circumstances have been favourable. Banks are more risk averse due to the economic slowdown and have not been actively extending loans. Meanwhile, lower yields and reasonable credit spreads mean that rates are appealing for borrowers. At the same time, very low bank interest rates make bond yields attractive to savers.
Already this year, corporations have sold more than Bt250 billion in longer-term bonds, not including short-term commercial paper, for an increase of 120 per cent from the same period last year.
The two main distribution methods for bonds are selling directly to retail investors, or selling to institutional investors such as mutual funds or insurance companies, which in turn distribute them to the general public.
The current craze for corporate bonds is to sell directly to retail investors.
On the surface, this appears to be more efficient. However, direct retail sales have major limitations with two key concerns - credit risk and liquidity risk.
Years ago, retail sales of bonds started out with issuance by the government, or by the very best corporate names. However, it has since evolved into virtually any company selling bonds to the general public, significantly raising the potential credit risk.
This has several implications:
Retail bond investors usually have exposure to only a few names and underestimate downside risks, while lack of diversification raises the possible loss should any transaction go bad.
Retail investors often do not have the resources to monitor and analyse changes in corporate credit risk on an ongoing basis.
Retail investors may not be knowledgeable enough to demand appropriate pricing to match the risk involved.
The other key concern is that retail-oriented bond issues usually lack liquidity in the secondary market. Even if savers plan to buy and hold bonds until maturity, unforeseen circumstances could make them change their minds.
If sales are possible at all, bid-offer spreads are likely to be very large to the small investor. In case of a forced sale, there could also be mark-to-market losses that are difficult for retail investors to hedge, unlike institutional investors that may be implementing yield curve strategies.
For all these reasons, institutional investors theoretically have many advantages over individuals in buying and managing bonds.
At the moment, local financial institutions still have room for development. Bond mutual funds tend to be focused on short-term money market debt, rather than on longer-term corporate bonds. There is a lack of activity in the secondary market, while hedging is still not widely used.
Over time, however, the market should continue to develop. Greater issuance will lend depth to the market. Institutional investors will gain in scale and sophistication. And hedging tools such as interest rate futures and repurchase agreements will become available, or more widely used.
In the medium term, this would be healthy for the local financial system, and would be better for consumers as well.
Circumstances have been favourable. Banks are more risk averse due to the economic slowdown and have not been actively extending loans. Meanwhile, lower yields and reasonable credit spreads mean that rates are appealing for borrowers. At the same time, very low bank interest rates make bond yields attractive to savers.
Already this year, corporations have sold more than Bt250 billion in longer-term bonds, not including short-term commercial paper, for an increase of 120 per cent from the same period last year.
The two main distribution methods for bonds are selling directly to retail investors, or selling to institutional investors such as mutual funds or insurance companies, which in turn distribute them to the general public.
The current craze for corporate bonds is to sell directly to retail investors.
On the surface, this appears to be more efficient. However, direct retail sales have major limitations with two key concerns - credit risk and liquidity risk.
Years ago, retail sales of bonds started out with issuance by the government, or by the very best corporate names. However, it has since evolved into virtually any company selling bonds to the general public, significantly raising the potential credit risk.
This has several implications:
Retail bond investors usually have exposure to only a few names and underestimate downside risks, while lack of diversification raises the possible loss should any transaction go bad.
Retail investors often do not have the resources to monitor and analyse changes in corporate credit risk on an ongoing basis.
Retail investors may not be knowledgeable enough to demand appropriate pricing to match the risk involved.
The other key concern is that retail-oriented bond issues usually lack liquidity in the secondary market. Even if savers plan to buy and hold bonds until maturity, unforeseen circumstances could make them change their minds.
If sales are possible at all, bid-offer spreads are likely to be very large to the small investor. In case of a forced sale, there could also be mark-to-market losses that are difficult for retail investors to hedge, unlike institutional investors that may be implementing yield curve strategies.
For all these reasons, institutional investors theoretically have many advantages over individuals in buying and managing bonds.
At the moment, local financial institutions still have room for development. Bond mutual funds tend to be focused on short-term money market debt, rather than on longer-term corporate bonds. There is a lack of activity in the secondary market, while hedging is still not widely used.
Over time, however, the market should continue to develop. Greater issuance will lend depth to the market. Institutional investors will gain in scale and sophistication. And hedging tools such as interest rate futures and repurchase agreements will become available, or more widely used.
In the medium term, this would be healthy for the local financial system, and would be better for consumers as well.
Kbank refocuses on corporate lending
Kasikornbank is refocusing on coporate lending to boost fee-based income, with a plan to increase corporate loans by 3-4 per cent next year.
Vasin Vanichvoranun, first senior vice president, Corporate Busniess Division, said that this year the bank expected to expand corporate lending to Bt290 billion from Bt280 billion at present, and that next year's level would be in line with the country's economic-growth forecast of 2.5-3.5 per cent.
With growth of 3-4 per cent, the porfolio will rise to Bt301.6 billion.
"Income from corporate-banking business this year will be Bt11 billion, and this will rise 12 per cent next year. While the fee and interest income ratio is 45:55 this year, it will be balanced next year," he said.
A bank survey of 10,000 corporations found that 20 per cent were Kasikornbank clients. The companies' annual sales range from Bt400 million to more than Bt5 billion.
Vasin said the percentage was more satisfactory than the bank's market share in the corporate-loan market, as it reflects corporate customers' satisfaction with its services. In the previous survey, the Kasikornbank percentage was 16-17 per cent.
He added that the bank's strategy next year was to continue being in partnership with customers, but it would try to be an adviser rather than simply a lender in order to develop long-term relationships that could establish the bank's position in their minds.
Corporate clients are now offered a veriety of services, including transaction financing such as cash management, trade solutions and supply-chain assistance.
Meanwhile, as interest rates may start to rise next year, along with inflation and oil prices, some customers may take the opportunity to adjust their financial structure. The bank is ready to serve this development through syndicated loans and advice on bond issuance, said Vasin.
Besides, it will provide a merger-and-acquisition service in order to satisfy customers who would like to expand their business in line with economic expansion.
Among the major constituents in Kasikornbank's corporate business are companies in the electrical, construction, construction materials and export-oriented industries, including those making electrical appliances and electronics, agricultural products and machinery.
Vasin Vanichvoranun, first senior vice president, Corporate Busniess Division, said that this year the bank expected to expand corporate lending to Bt290 billion from Bt280 billion at present, and that next year's level would be in line with the country's economic-growth forecast of 2.5-3.5 per cent.
With growth of 3-4 per cent, the porfolio will rise to Bt301.6 billion.
"Income from corporate-banking business this year will be Bt11 billion, and this will rise 12 per cent next year. While the fee and interest income ratio is 45:55 this year, it will be balanced next year," he said.
A bank survey of 10,000 corporations found that 20 per cent were Kasikornbank clients. The companies' annual sales range from Bt400 million to more than Bt5 billion.
Vasin said the percentage was more satisfactory than the bank's market share in the corporate-loan market, as it reflects corporate customers' satisfaction with its services. In the previous survey, the Kasikornbank percentage was 16-17 per cent.
He added that the bank's strategy next year was to continue being in partnership with customers, but it would try to be an adviser rather than simply a lender in order to develop long-term relationships that could establish the bank's position in their minds.
Corporate clients are now offered a veriety of services, including transaction financing such as cash management, trade solutions and supply-chain assistance.
Meanwhile, as interest rates may start to rise next year, along with inflation and oil prices, some customers may take the opportunity to adjust their financial structure. The bank is ready to serve this development through syndicated loans and advice on bond issuance, said Vasin.
Besides, it will provide a merger-and-acquisition service in order to satisfy customers who would like to expand their business in line with economic expansion.
Among the major constituents in Kasikornbank's corporate business are companies in the electrical, construction, construction materials and export-oriented industries, including those making electrical appliances and electronics, agricultural products and machinery.
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