Thai banks open to foreign investment<\/p>\n
SINGAPORE (Reuters): Thai Prime Minister Chuan Leekpai on
\nMonday threw open the doors of the Thai banking industry to
\nforeign investment, urging more equity interest.<\/p>\n
\"In Thailand there had been extensive overhaul of laws and
\nregulations and it can be said there is now an open door for
\nforeign participation in our banking sector,\" he said at a
\nquestion and answer session at the East Asia Economic Summit.<\/p>\n
\"Last week for example, a bank in Singapore took an equity
\nstake in a Thai bank of over 75 percent. So I would now urge all
\nof you to take a similar stake in Thai banks,\" he said.<\/p>\n
That deal between Singapore's United Overseas Bank and
\nThailand's Radanasin Bank saw the Singapore group take a 75
\npercent stake in Radanasin for 15 billion baht ($383.6 million).<\/p>\n
Chuan told reporters he saw interest from foreign players in
\nThai banking institutions rising as confidence in the country
\ngrew.<\/p>\n
\"There have already been foreign investors who have taken
\nequity holdings in four commercial banks in Thailand and with
\nincreased confidence of an economy on the recovery, there is an
\nexpectation that more foreign investors will be coming into the
\nbanking sector.\"<\/p>\n
Singapore's DBS Bank bought a majority stake in Thai Danu Bank
\nin 1998. ABN AMRO Bank of the Netherlands took a 75 percent stake
\nin Bank of Asia last year, while Britain's Standard Chartered
\ntook a 75 percent stake in Nakornthon Bank last month.<\/p>\n
Chuan said bank non-performing loans (NPLs), a major concern
\nof foreign investors, were going down but not as fast as the
\ngovernment would like.<\/p>\n
\"NPL's have been declining but they have not declined as fast
\nas we would like to see. And it is expected by reports from the
\nBank of Thailand that the reduction in NPLs will be more rapid in
\nthe future,\" he told reporters.<\/p>\n
The central bank said on Friday that Thai non-performing loans
\nstood at 46.76 percent at the end of August, a near half
\npercentage point improvement from the end of July.<\/p>\n
The Thai Prime Minister said in his keynote address that
\nstructural changes and economic reforms had to be extended to the
\n\"regional and global levels as well.\"<\/p>\n
He said structural changes, while not easy, had been taking
\nplace in Thailand.<\/p>\n
\"I, however, do not wish to understate the problems and
\ndifficulties we have been facing in pushing forward these
\nreforms. Though the process has clearly started, it is not yet
\ncomplete and much more remains to be done.\"<\/p>\n
Chuan said the government had no gross domestic product
\nprojection estimate yet but said he expected GDP to grow between
\nthe second and third quarters of this year.<\/p>\n
After contracting by around 10 percent in 1998, Thai GDP has
\nstabilized and most economists expect modest growth this year.<\/p>\n
The International Monetary Fund said last week the Thai
\neconomy should grow four percent in 1999 and any revision to this
\nforecast would be on the \"positive side\".<\/p>",
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"sponsor": "Okusi Associates",
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