S&P (rating agencies who believes them today?!) revised Thailand’s banking system upwards mid-week, but regardless it does finally demonstrate that Thailand has in fact improved a lot in the past 10 years despite the on going political rubbish.
We revised our industry risk score for Thailand (foreign currency BBB+/Stable/A-2, local currency A-/Stable/A-2, axAA/axA-1) because, in our view, the banking sector’s institutional framework has improved to “intermediate risk” from “high risk”, as our criteria define the term. This reflects the sustained improvement in the performance of the banking sector regulator since the Asian financial crisis of 1997. In our view, the regulator has become relatively more proactive toward reducing the banking system’s vulnerability to financial crises. We expect it to identify problems early on and quickly remedy them.
They made a couple interesting points during the announcement:
- Thailand has low income levels and an underdeveloped infrastructure system
- Expect loan growth to remain high in 2012
- Economic imbalance in Thailand as low risk
- Regulations & supervision are now broadly within international standards
- Current government “highly supportive” towards domestic banking