Foreign banks help SCB track exchange rates
Siam Commercial Bank has hired foreign banks to help monitor currencies in the global economy as the bank expects exchange rates will become more volatile with the tapering of the US Federal Reserve's quantitative easing (QE) programme.
Kannikar Chalitaporn, president of SCB, said yesterday that the bank plans to issue bonds denominated in US dollars next year to top up its liquidity, so it needs to know when the timing is right.
This year, major banks including SCB raised funds through US dollar unsecured notes. SCB will continue issuing US dollar bonds next year to match up with the offshore activities of Thai corporations.
The amount of the bonds is US$500 million-$1 billion.
Raising funds in foreign currencies is part of liquidity management at SCB. Those funds are loaned to customers with activities overseas, while fund mobilisation through deposits serves local loans.
The US bond issue should be done before QE tapering.
The bank is also encouraging its customers to hedge against currency volatility.
Political instability is one of the challenges facing SCB, but the bank should be prepared at all times to revise its business plan should the global economy and domestic politics spring surprises.
Loan growth of the banking industry next year will slow to 8-9 per cent from 10-11 per cent this year. SCB aims to grow at a similar speed, or 9-10 per cent, which is down from the expected growth rate of 12 per cent this year.
Some segments will see slacker business such as mortgages, but auto lending next year should shift up to normal growth again.
The political turmoil has sapped purchasing power in the remaining months of this year even though the bank believes the difficulties will be short term.
Nonetheless, SCB has done alright, hitting its 2013 loan growth target of 12 per cent in the first nine months, she added.
Yesterday SCB and the Federation of Thai Industries opened the Eighth SCB-FTI Factory Outlet Fair at SCB’s head office to promote SMEs and help spur domestic consumption.
Spending over the five days of the fair is targeted at Bt20 million.
