Chase Says It's Not Planning to Cut Thailand Exposure

Chase Manhattan Corp. plans to maintain its current exposure to Thailand, even though observers see no quick end to the nation's recession.

Though the downturn "clearly had an impact" on performance, Chase's Thai branch earned $76 million before taxes, said Douglas C. Asper, senior country officer for Thailand.

The Thai economy has been battered by a sharp drop in the value of the baht, prompting analysts to predict that U.S. banks operating in the country will suffer severe losses.

However, Mr. Asper said in prepared remarks that Chase sees good opportunities for earnings in Thailand in business lines such as risk management, advisory services, mergers and acquisitions, and corporate restructurings. He added that Chase also planned to "selectively enter" Thailand's retail banking market.

"We very much see our customers as good companies in a difficult market," Mr. Asper said.

U.S. banks' cross-border exposure to Thailand, excluding locally booked loans and other assets, totaled $6.2 billion as of Sept. 30.

According to yearend reports, BankAmerica Corp. had $881 million in cross-border loans to Thailand, Bankers Trust New York Corp. had $600 million, Chase $1.9 billion, and Citicorp $300 million. J.P. Morgan & Co. had $1.1 billion in total outstandings and commitments to Thai clients.

The figures exclude locally booked assets, which can often be substantial. Assets booked locally by Chase in Thailand through its Bangkok branch, for example, increased 18.4% last year, to $1.08 billion, despite the recession.

Citicorp, meanwhile, had $3.1 billion in local assets in Thailand, including $1 billion in consumer loans and $700 million in commercial loans.

Chase's earnings contrast with setbacks at some other U.S. banks. Bankers Trust, for example, took a $27 million charge in the fourth quarter for Asian restructurings and claims. A substantial portion of that amount went toward a writedown of the bank's minority stake in Thai Investment and Securities Co., a Thai brokerage firm.

Some banks view the crisis as an opportunity.

Citicorp, for example, explored acquiring First Bangkok City Bank earlier this year, and Amsterdam-based ABN Amro last week signed an agreement to acquire a 75% stake in Bank of Asia Public Co.

Analysts said Chase's results were a welcome sign, but they also cautioned that the outlook for this year remains uncertain.

"It's a positive number," remarked Raphael Soifer, a banking analyst with Brown Brothers Harriman. "Recent news shows that Thailand is on the mend, but we still really don't know what's going to happen next."

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