Banking industry improves: S&P
リンク: Bangkok's Independent Newspaper.
Banking industry improves: S&P
Published on May 06, 2005The Thai banking industry’s risk rating has improved to moderately high from high over the past year, according to international standards, and the improvement is expected to continue, the global credit ratings agency, Standard and Poor’s, said in a report published today.
“Apart from better economic conditions, the key factors driving the improvement include: structural improvements made by Thai banks in their capital levels, asset quality measures, and funding,” said the agency’s credit analyst, Nancy Koh.
The Bank of Thailand’s measures to tighten loan-loss reserve requirements and to allow further sales of impaired assets under the state-owned asset management company ambit, signals another step in the right direction in rehabilitating problem assets, she said.
Accompanying improving asset quality is a better operating profit performance and a pick-up in credit demand.
However, the system continues to be challenged by recurring problem loans, the need to sustain reserves coverage against impaired assets, and capitalisation - given uncertainty over the ultimate recovery of residual problem assets, Koh said. A major obstacle is limited progress in addressing corporate indebtedness and improvement to the country’s legal framework, especially bankruptcy laws, she added.
The Nation
