Banking
Moody’s revises outlook for banks in Asia Pacific to stable from negative
Moody’s Investors Service has revised to stable from negative its outlook for banks in Asia Pacific as banking risks in the region are stabilizing

Moody’s Investors Service has revised to stable from negative its outlook for banks in Asia Pacific as banking risks in the region are stabilizing due to stable or improved operating conditions.
“Asset quality is stabilizing in most banking systems, as the negative
credit cycle in many of these systems has proven to be shallow with a
moderate economic upturn now evident in APAC, while commodities prices
are relatively stable,” says Stephen Long, Moody’s Managing Director for
Financial Institutions in the region.
Moody’s conclusions are contained in its mid-year update of its annual
outlook on banks in APAC, “Banks — Asia Pacific, Stabilizing credit
cycle”, published on 3 July 2017.
The industry outlook indicates the rating agency’s forward-looking
assessment of fundamental credit conditions that will affect the
creditworthiness of the banking industry over the next 12-18 months.
“A total of 77% of bank rating outlooks in APAC are now stable, up from 64% at end-2016, while banks in China, Hong Kong, Singapore, Australia,
New Zealand and Mongolia are mostly behind the increase in stable outlooks, following rating downgrades in some cases,” adds Long.
Moody’s further believes that commodity-related problem loans have mostly
peaked and the rating agency’s expectation of relatively stable energy
and other commodity prices in 2017 should support bank asset quality in
this segment.
Moreover, capitalization and profitability show good levels against risk,
while capital buffers are generally higher due to moderating growth in
risk weighted assets and more stringent regulatory requirements.
Profitability will recover in many markets because of lower credit costs
and stable to higher net interest margins.
Funding and liquidity will also remain a credit strength, and most APAC
banks are mostly deposit funded with a moderate reliance on wholesale
sources — with the exception of Australia, New Zealand and Mongolia —
and liquid balance sheets.
Foreign capital flows are also returning to emerging Asia, although the
risk of reversal remains due to market uncertainty around US interest
rates and US dollar strengthening, China’s re-balancing, potential
policy changes in key economies, and global/regional political issues.
In terms of long-term risks, corporate and household leverage remain
elevated in parts of APAC, but the build-up has slowed, supporting the
banks’ asset quality. Furthermore, property prices are rising in many
economies, amplifying bank credit risks in the case of a major market
correction.
Latent property-related risks are more pronounced in Australia, China,
Hong Kong, New Zealand, Malaysia and India, based on property price
appreciation, the banks’ exposure level, or both.
Moody’s expects that the trend for government support will be stable for
the majority of APAC banking systems. This is because regulators are not
keen to embrace wider bail-in measures and early public support remains
the preferred way to prevent banking stress in most systems. The
exception rather than the rule is Hong Kong, which is moving closer to an
operational resolution regime and will likely implement one in 2017, and
this situation could lead to a lower level of government support uplift
for some banks.
The banking systems where Moody’s has coverage in Asia Pacific include,
with the advanced economies, Australia, Hong Kong, Singapore, Japan, New
Zealand, Korea and Taiwan. In the case of the emerging and developing
economies, they include China, Bangladesh, India, Indonesia, Malaysia,
Mongolia, Thailand, the Philippines, Sri Lanka and Vietnam.
Subscribers can read the full report at
http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1080890
Banking
Thailand’s Public debt to GDP ratio within framework says Finance Minister
Currently, Thailand’s ratio of public debt to gross domestic product (GDP) stands at 49.34 percent, which is below the Fiscal Sustainability Framework set at 60 percent.

BANGKOK (NNT) – The Thai economy is gradually recovering, with monthly economic indicators, such as the consumer confidence index and domestic spending, showing positive signs.
(more…)Banking
Raising inequality posing credit risks for sovereign in APAC countries
Governments with weaker social protection systems and tighter fiscal positions will face tougher challenges in tackling income inequality

Moody’s Investors Service says in a new report that the impact of the coronavirus pandemic will exacerbate income inequality in APAC, posing credit risk for sovereigns across the region and in particular for those with weaker fiscal capacity and social protection systems.
(more…)Banking
Bank of Thailand steps in to curb recent baht strength
Bank of Thailand accelerates measures to advance the development of the new Thai FX Ecosystem and to limit excessive currency volatilities

In a press release published on the 20th of November, the central bank’s Monetary Policy Committee (MPC) has expressed concerns over the rapid appreciation of the baht as this affects the fragile economic recovery.
(more…)-
Economics1 week ago
96% of Foreign Investors still confident in Thailand says BOI
-
Investment1 week ago
Thailand BOI new measures to boost post-Covid-19 investment
-
Companies1 week ago
Thai Firm to produce 200 million doses of Covid-19 vaccine
-
Investment4 days ago
Thailand Saw $1.7 billion Applications in Bio-Circular-Green (BCG) Investments in 2020, BOI Says