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Published on July 31, 2007

Director Khunying Jada Wattanasiritham said the philosophy worked for business.

Shortly after the 1997 crisis, capital was king. All banks struggled for new capital. Siam Commercial managed to raise Bt70 billion in two capital increases - the most of any bank.

The first raised about Bt5 billion and the second Bt65 billion.

On August 14, 1998 the government announced measures to resolve corporate liquidity and strengthen financial-sector soundness. These allowed the bank to raise capital in a global offering. The Finance Ministry provided half the Bt65 billion. Tarrin Nimmanahaeminda was minister at the time.

The bank's existing shareholders - including the Crown Property Bureau - helped inject capital.

With state measures and shareholder willingness, the bank successfully convinced foreign investors to buy shares.

"The achievement of each bank in fund raising during that time depended on karma. Banks' business operations in the past helped create investor trust," Jada, a former bank president, added. To maintain a capital-adequacy ratio in line with Bank of Thailand requirements amid excessive bad debt was most difficult.

If the bank could not achieve requirements, it could have lost its banking licence.

Non-performing loans, or NPLs, at the Kingdom's oldest bank had doubled to around 46 per cent of lending after the crisis.

Under current strict central bank regulations, the bank's NPLs then would have been as high as 60 per cent to 70 per cent.

 Aside from the government, the bank's directors, shareholders and staff all contributed to its success. A number of branches closed and employee numbers were cut in a voluntary programme by 1,700 between 1998 and 1999.

"The lessons from the crisis made the bank turn back and consider itself and it tried to improve itself. We should look ahead beyond our noses to prepare for the future," she said.

Three pillars Siam Commercial needs to strengthen in the future are people, processes and strategy, she said.

"The bank doesn't want to be the best bank in categories. It wants to be the best organisation among all stakeholders, including shareholders, customers, staff and society. These may be old-fashioned words but it's a real goal for the bank," Jada said.

Somruedi Banchongduang

The Nation