Local Thai banks health robust: Fitch

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Local Thai banks health robust: Fitch 
Bangkok Post: 7 Jul 2010
Local banks' health robust

Banks will continue to show strong performances in 2010 despite the economic and political shocks of the past two years, says credit agency Fitch Ratings.

"The heightened operating risks from the prolonged political turmoil in Thailand and still-weak economic environment could impact profitability, loan growth and asset quality in the medium term," said Vincent Milton, managing director of Fitch Ratings (Thailand).

"However, strong capital and liquidity should help at least the stronger banks to maintain overall performance in 2010."

Bangkok Bank, Siam Commercial Bank and Kasikornbank - all rated BBB+/stable by the agency - should continue to outperform the sector, with Bank of Ayudhya (BBB/stable) also emerging as a "strong performer".

TMB Bank, rated BBB-/negative, still lags, "although its performance has stabilised and should improve in 2010", said Mr Milton.

Asset quality could come under pressure, particularly in the tourism, retail trade and consumer sectors.

But while non-performing loans for Thai banks could rise this year, average tier-one capital of 12% and total capital of 16% "should provide a strong buffer", Fitch said. The agency forecasts economic growth of 3.8% this year.

http://www.bangkokpost.com/business/economics/185269/local-banks-health-robust