6 June 2024

Thailand’s commercial banks and other financial institutions have not been affected by the recent failures the US’s Silicon Valley Bank and New York-based Signature Bank in the past week, Deputy Government Spokesperson Traisuree Traisoranakul said today (Monday).

She disclosed that Prime Minister Prayut Chan-o-cha has, however, ordered the government’s economic team to monitor the situation closely.

She said that no Thai commercial banks or financial institutions had invested or engaged in any transactions with the two failed US banks, adding that the impact of the closures on the US economy is limited, because the services of the two banks were limited, unlike ordinary commercial banks, and thanks to swift intervention by the US regulators.

According a Bank of Thailand report at the end of last year, all Thai commercial banks’ BIS (Bank for International Settlements or capital to risk asset ratios) amounted to 19.4%, with a liquidity coverage ratio (LCR) at 197.3 and the amount of non-performing loans at 2.73%, whereas the NPL coverage ratio stands at 171.9%. Credit extension and deposits are not concentrated within certain groups, but spread broadly.

The strict enforcement of measures by the Bank of Thailand has resulted in the strengthening of the Thai banking system and has enabled Thai commercial banks to weather the global financial and COVID-19 crises, said Traisuree.

Moreover, she said, Thailand has strong systems in place to protect depositors, through the creation of a 124 billion baht fund, which guarantees the deposits of up to 98% of bank deposits, to the tune of one million baht per depositor.