Abstract
This paper studies the performance of domestic and foreign banks in Thailand in terms of profitability and other characteristics after the East Asian financial crisis. The study is based on a micro bank-level panel data on financial statements by pooling cross-bank time-series data with the major balance sheet and income statement ratios for domestic and foreign banks in Thailand for 1995–2000. All banks were found to have reduced their credit exposure during the crisis years, and to have gradually improved their profitability during the post-crisis years. The results indicate that foreign bank profitability is higher than the average profitability of the domestic banks although importantly, in the post-crisis period, the gap between foreign and domestic profitability become closer. This shows some positive results of the financial restructuring program.
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Saovanee Chantapong (Ms) currently works as a senior economist at the Office of Macroeconomic Policy and Analysis. She received her ph.D. in Economics from the Faculty of Economics and Management at the University of Hannover (Germany) in 2005. Paper submitted to the International West-East Conference 2003: Accounting and Finance in Transition: European and Asian Experiences and Public Policy Considerations, London, 10–12 July 2003. This paper is a revised version of the Kiel Advanced Studies Working paper (May 2002) which was written when the author participated in Advanced Studies Programme (ASP) at the Kiel Institute for World Economics (IFW), Germany. The author is greatly indebted to Dr. Ralph Heinrich, her discussant and Dr. Claudia M. Buch for their valuable comments. The author would like to thank Bussaracum Petchclai and Augsupalee Watcharakiet, her colleagues at the Bank of Thailand for their great help. The paper has benefited from very helpful comments from Felix Hammermann, Om Prakash Mall and Paula Jaramillo. The author is also grateful to Prof. Dr. Lukas Menkhoff, Chair, the Institute of Monetary Economics, Faculty of Economics and Management, University of Hannover. The views expressed in this paper are entirely those of the author only and do not necessarily reflect those of the Bank of Thailand. Remaining errors are under the author’s responsibilities.
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Chantapong, S. Comparative Study of Domestic and Foreign Bank Performance in Thailand: The Regression Analysis. Econ Change 38, 63–83 (2005). https://doi.org/10.1007/s10644-005-4523-5
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DOI: https://doi.org/10.1007/s10644-005-4523-5