Banks best prepared for AEC, Deloitte says
If financial strength defines bank competitiveness, Thai banks are in the best position to stand up their counterparts in Asean countries, according to Deloitte Touche Tohmatsu Jaiyos.
Of all industries, banking is the most ready when the regional market under the Asean Economic Community framework kicks off in 2015, thanks to years of building capital in compliance with the Bank for International Settlements’ stricter capital rules.
"Preparations have been made to strengthen Thai banks’ capability," Subhasakdi Krishnamra, managing partner, told a news conference yesterday on "Thailand’s Economic Direction under Global Changes".
Deloitte Touche is now studying the possible impacts of the AEC on Thai businesses, to guide them in |how to thrive in the new market environment.
Siam Commercial Bank is one that already enjoys a competitive edge, as it has beaten some foreign banks in Thailand, ??? in what way?? he said.
Chavala Tienpasertkij, a partner of Audit Services, said it would not be easy for Thai banks to maintain their lead when the AEC starts. Looking at strategies, most Thai banks are focused on local demand, which remains high. However, they need to look outwards, both commercial banks and specialised financial institutions. Supporting the process is commercial bank’s preparation to meet the BIS’s Basel III requirements, which will take effect next year.
The AEC will redraw the economic landscape, which should further attract global attention to Asia, he said.
"The game has changed. Before, taxes were used to block entry. Now, other rules are emerging as countries are protecting their businesses in light of higher competition. The AEC will help in ensuring everyone is playing on the same field."
Besides banks, which demonstrate highest efficiency, Thai companies in the food, construction-material, energy and consumer-product industries also show potential to blossom from the AEC. This explains why more Thai companies, mainly in the construction-material and food industries, are looking for partners in other countries for joint ventures or mergers and acquisitions, Chavala said.
Against fears that small and medium-sized enterprises will collapse under the pressure, Apirak Jatukanyaprateep, a partner for Consulting Services, insisted that the AEC’s benefits would also spread to Thai SMEs. However, they should change their attitudes and adapt more to the new business rules as well as consumer behaviour.
"With the AEC, the market will be bigger. It depends on their preparation to cope with the changes."
