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Big 3 banks better off with TAMC: report BANGKOK Bank (BBL), Thai Farmers Bank (TFB) and Siam Commercial Bank (SCB) will likely benefit the most among private banks from the formation of Thai Asset Management Corporation (TAMC), as they will get some breathing room to undertake internal recapitalisations, according to a report by an investment bank. Thai banks also stand to see the valuations of their shares boosted as the dilution risk will be lessened because of the TAMC, said Fox-Pitt, Kelton (FPK), which specialises in the global financial services sector. FPK is a wholly owned subsidiary of the world`s second largest health and life reinsurance firm, Switzerland-based Swiss Re. "Despite the fact that this is an insolvent sector and that risks remain high, we believe that the risk-reward ratio favours investment," FPK said. It plans to continue maintaining a "buy" recommendation for TFB and a "hold" for SCB, but will likely upgrade Bangkok Bank to "buy" from "attractive" later this week. FPK expected about 30-40 per cent of private banks` non-performing loans (NPLs) will be bought at net book value, with banks taking on about 50 per cent of any long-term loss. "Our 12-scenario analysis suggests that, even under fairly stringent conditions, it will be in the banks` interests to participate in an NPL sale," the investment bank said. FPK noted that although BBL, TFB and SCB suffer from weak capitalisation and are overburdened with poor quality assets, they can make such a sale without needing to raise external regulatory capital. "This is not to say that they [banks] will participate or that they won`t raise capital, merely that there is no major dilution threat to the banks from the range of deals currently being touted," the report added. According to FPK`s base-case scenario, which is the most likely, BBL`s valuation will fall by 6 per cent, TFB`s will improve by 12 per cent, while SCB`s will see a 20-per-cent deterioration, as a result of the impact of the TAMC. The base-case scenario assumed a sale of 30 per cent of NPLs at a 10-per-cent discount to book value, paid for with a 2.5-per-cent coupon bond and subject to a 50:50 loss-sharing arrangement. Even under a 25-per-cent discount to book value scenario, Thai banks can essentially afford to sell off more than 40 per cent of their NPLs and not seek external regulatory capital. Following the NPL sale, BBL, TFB and SCB would still be left with about a 20-per-cent NPLs-to-total loans ratio on average. However, banks are required to acquire capital to make up for continued low reserve coverage of their remaining NPLs. The plan for the TAMC concluded that it would buy only those loans having more than two creditors, which will total about Bt250 billion out of about Bt630 billion in bad debt at private banks, of which Bt150 billion is with banks` subsidiary AMCs. The Nation - 16.3.01 - |
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| aus der Diskussion: | Waste or make money in Thailand |
| Autor (Datum des Eintrages): | BodyG (15.03.01 20:51:07) |
| Beitrag: | 544 von 611 (ID:3110675) |
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