Fitch: Thai Bank Buffers To Be Challenged By Economic Weakness

Wed Aug 27, 2014 10:00pm EDT

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(The following statement was released by the rating agency) Link to Fitch Ratings' Report: APAC Banks Chart of the Month August 2014 here BANGKOK, August 27 (Fitch) Thai commercial banks have sufficient buffers to cope with a downturn, but they could be challenged if there is an economic slowdown that is more severe or protracted than expected, says Fitch Ratings in its APAC Banks - Chart of the Month report. Loan growth has slowed down over the past year, while capital levels are acceptable and non-performing loans (NPLs) appear to have stabilised. However, overall levels of private-sector and household leverage have remained high (at 154% and 83% of GDP respectively), which could quickly lead to credit quality concerns in an economic recession. Fitch expects loan growth to pick up in 2H14 as the business environment becomes more stable and pent-up investment is released. An increase in loan growth is also likely to contribute to greater deposit competition among banks, particularly as underlying trends in funding already show tighter liquidity conditions. The report is available by clicking on the link above or at www.fitchratings.com Contact: Parson Singha Senior Director +662 108 0151 Fitch Ratings (Thailand) Limited Park Ventures, Level 17 57 Wireless Road, Lumpini Patumwan, Bangkok 10330 Patchara Sarayudh Director +662 108 0152 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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