Saovanee Chantapong (Christian-Albrechts-Universitat zu Kiel)

Comparative Study of Domestic and Foreign Bank Performance in Thailand: The Regression Analysis

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. The estimation results of this study indicate that foreign bank profitability is higher than the average profitability of the domestic banks. All banks gradually improved their profitability during the post-crisis period after the shock. As for the commitment to domestic economy, both domestic and foreign banks reduced their credit exposure during the hard times. Importantly, the study finds that in the post-crisis period, the gap between foreign and domestic profitability become closer. This shows some positive results of the financial restructuring program.

Keywords: International Financial Markets, Banks, Ownership Structure, Restructuring

JEL Codes: G15 G21 G32 G34

Session: 3c   Room 2002   Category: Industry studies 1

Paper