September 15, 2008
BANGKOK (AFP) - Thai banks are unlikely to suffer from the collapse of US financial giant Lehman Brothers, the deputy governor at the Bank of Thailand said Monday.
Bandit Nijthaworn said holdings tied to Lehman Brothers represented only 1.3 percent of the total assets of Thailand's 14 commercial banks, noting that the banks have posted strong results for the first half of the year.
"Thai banks have direct investments in loans and debt instruments worth only 4.3 billion baht (124.9 million dollars) at Lehman Brothers. That amount is quite low, compared to their total investment worth 1.02 trillion baht in several countries," Bandit said.
"Shareholders at Thai banks will be not affected," he said.
Seventy percent of cash flow at commercial banks in Thailand is from local deposits, he said.
Lehman Brothers said it would file for bankruptcy on Monday after a frantic weekend of negotiations failed to arrange a rescue.
Despite reassurance from central banks, European and Asian stocks plunged by three to five percent, and the dollar fell.
