June 19, 2020 / 12:39 PM / a month ago

Thai central bank asks lenders to strengthen capital to cope with coronavirus risk

BANGKOK (Reuters) - Thailand’s central bank on Friday asked commercial banks to prepare capital management plans for the next 1-3 years, as the widespread impact of the outbreak on businesses and individuals could affect asset quality.

The management plans should take into account the outlook for the economy and the ability of debtors to do business after the outbreak situation has eased, the governor, Veerathai Santiprabhob, said in a statement.

While working on the new plans, the central bank also asked lenders not to pay interim dividends for their 2020 performance and not to buy back shares, to keep capital levels strong so they can support businesses.

The central bank has recently said the economy could shrink this year more than forecasts. In March, it predicted a contraction of 5.3% this year.

Reporting by Orathai Sriring; Editing by Martin Petty

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