Siam News Network » Banking

Fitch downgrades Hungary to junk status

Lakshmi Balasubramanian — Fri, 06 Jan 2012 22:56:43 +0000

Budapest: Fitch Ratings downgraded Hungary's credit grade to junk status on Friday, citing a standoff between the country and the European Union and the International Monetary Fund over rescue loans. Fitch, which followed similar moves from Moody's and S&P, kept a negative outlook, indicating a more than a 50 per cent chance for another downgrade within the next two years

China’s Real Estate Bubble May Have Just Popped

Zhong Li — Tue, 03 Jan 2012 14:29:27 +0000

China’s real estate scene is reminiscent of the 2007 US market: developers are slashing prices and infuriating owners who paid top yuan for properties. Problems in the real estate market are extending into steel, banking, mining and other sectors. Vacant developments are numerous because wealthy Chinese savers have few alternatives for investing growing wealth. “Beijing's response to the global financial crisis added jet fuel to the fire,” writes Patrick Chovanec for Foreign Affairs, arguing that investors, not urban residents contributed to the bubble. “To maintain GDP growth of nearly ten percent during a massive downturn in global demand, China's leaders engineered a lending boom that expanded the country's money supply by roughly two-thirds.” Developers, after ignoring warnings to ease up on capacity, have urged the government to lift restrictions on owning multiple homes. By letting the bubble pop, the government could instantly create affordable housing for less affluent Chinese. – YaleGlobal Speculation, excess inventory, vacant developments, price reductions – a host of factors are set to undermine China’s real estate market and economic growth Patrick Chovanec Foreign Affairs, 26 December 2011 Rights:Copyright © 2002-2011 by the Council on Foreign Relations, Inc.

SBV sets stricter rules on new bank establishment

Thailand Real Estate — Mon, 26 Dec 2011 02:51:00 +0000

The statements made by the State Bank of Vietnam recently make people understand that while Vietnam is still busy “putting the banking system in order,” it would nearly say “no” to the establishment of any new banks.

Indian banks healthy but stress signals showing

Lakshmi Balasubramanian — Tue, 04 Oct 2011 22:12:03 +0000

The past three months have been tough for Indian banking. High interest rates and threats of a global recession have taken their toll on bank stocks.

The NSE banking index fell 15 per cent compared with the Nifty’s 11 per cent slide in the past three months. Indian banks, ironically, have never been in a better state of health in the past 10 years. A recent study by Boston Consulting Group (BCG) found that bad loans fell from a peak of 11.4 per cent in 2001 to just 2.4 per cent in 2010, showing the efficiency of management of capital. In fact, Indian banks have been performing better in controlling defaults with only 0.6 per cent of loans handed out last year turning sticky, compared to 1 per cent in the US and China. Indian banks also have a cost-to-income ratio of 47 per cent, which is lower than Germany, France and the US.

The main reason for the robustness was the banks’ focus on return on investment, cost-to-income ratios and the efficient use of technology.

BCG expects that by 2025 the Indian banking sector will be the third largest in the world on assets, behind China and the US. Indian banks have brought bad loans down to 2.4 percent over 10 years, but now they need to be careful. Forbes India But now stress signals are showing up.

The Reserve Bank of India expects non-performing assets (NPA) to inch up to 2.9 per cent during 2011. IDFC Securities, a broking firm, recently said at least 17 per cent of loans are stressed and some could go bad.

Total bank credit to the industrial sector stands at about Rs 17,60,600 crore. “Credit to power and infrastructure sectors has grown 40 per cent in the past four years and the proportion of the same has gone up to 14 per cent in terms of total credit offtake, which has created additional risks to the banking segment,” says Ajay Parmar, head of institutional research at Emkay Global.

State-owned banks have a higher allocation to small industries, which could get hurt early if there is an industrial slowdown. Additionally, the central bank’s battle with persistent inflation is raising the cost of money, pressuring net interest margins that are expected to continue to narrow for at least another two years.

But no one is pressing the panic button yet because there is no dearth of liquidity in the system.

Says Rajeev Thakkar, CEO, Parag Parikh Financial Advisory Services, “If margins are high then NPAs are not a cause for concern...

There is a difficulty in the system but we are certainly not into recessionary territory.” (Follow IBNLive.com on Facebook , on Twitter , on YouTube , and on Google+ for updates that you can share with your friends.) Thank you.

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Are Thai banks profits too high ?

thailand-business-news — Thu, 21 Oct 2010 19:47:01 +0000

Most Thai banks showed improvement in quarterly net profit, with the fifth-largest Thanachart Capital (TCAP) marking the highest growth at 53.5 per cent in the third quarter after its acquisition of Siam City Bank (SCIB). Hefty profits chalked up by Thai banks this year have again given rise to criticism about the high cost of financial intermediation in Thailand. Thailand Business News

More measures to curb currency raise says Bank of Thailand

thailand-business-news — Wed, 06 Oct 2010 18:40:38 +0000

The baht has climbed 11% this year as global funds bought 41.9 billion baht more of local shares than they sold. The Bank of Thailand (BoT) is monitoring the baht movement closely and is studying additional measures to oversee the currency Thailand Business News

Bank of Thailand Urges Banks to Enhance Security over Internet Banking

Zhong Li — Sun, 15 Aug 2010 09:00:00 +0000

The Bank of Thailand has alerted commercial banks to improve their security systems, after a hacker stole personal information belonging to a bank customer and used it to transfer money via Internet banking services. Meanwhile, the central bank continues to receive a stream of complaints regarding Internet banking and ATM fraud.

Growth momentum encourages Foreign banks operating in Thailand

thailand-business-news — Tue, 10 Aug 2010 21:21:29 +0000

Foreign banks operating in Thailand reiterated their readiness to increase lending in an effort to help maintain the country's economic growth momentum.Thai banks provide a wide range of services throughout the country. Most foreign banks are represented, however, at this stage they offer limited services to the individual consume Thailand Business News

Four banks to close all BK branches

thailand-business-news — Wed, 19 May 2010 10:55:05 +0000

As the situation is escalating, the Bangkok Bank, Krung Thai Bank, Kasikornbank and Siam Commercial Bank will close all of their Bangkok branches at 1pm on Wednesday, Prasarn Trairatvorakul, chairman of the Thai Bankers Association said.

Standard Chartered Regional Head hints on Real Estate in Thailand

thailand-business-news — Thu, 01 Apr 2010 02:55:45 +0000

Mr. Fergal G Harris, is Regional Head, Commercial Real Estate, South East Asia Wholesale Banking, Standard Chartered How would you rate the Thailand luxury property sector’s performance in 2008 and early 2009 and what were the major issues ... Thailand Business News