US tariffs force ttb to conduct stress tests

TMBThanachart Bank (ttb) has initiated stress tests to gauge the risks and potential impacts of US tariffs on Thai exports.

- SOMRUEDI BANCHONGDUANG

Piti Tantakasem, chief executive of ttb, said at its shareholder meeting on Monday the Bank of Thailand mandated banks, particularly Domestic Systemically Important Banks (D-SIBs), conduct stress tests to prepare for potential risks and impacts arising from tariff-related factors. Ttb is one of six D-SIBs in Thailand.

As part of the stress test, the central bank outlined various risk and impact scenarios to ensure that banks are equipped with appropriate response plans.

“The stress test will help banks, to some extent, anticipate risks and prepare mitigation strategies. However, it is still too early to clearly assess the impact on customers and the bank's loan portfolio,” he said.

Although the trade war benefited Thai exports in the first quarter of this year, the impact is expected to materialise from the second quarter onward, said Mr Piti.

During the pandemic, similar stress tests involved collaboration at various levels, including the Thai Bankers' Association, the central bank, and the government sector.