In February 1999, TDB and DBS announced a capital raising exercise which is expected to raise between Bt12 billion and Bt17 billion to allow TDB to meet BOT's provisioning guidelines ahead of Year 2000 as well as for future expansion of business. This exercise consists of a rights issue of shares, an issue of Capital Augmented Preferred Shares (CAPS) to be placed in Thailand, and CAPS with a convertible feature to be placed with DBS. TDB's total capital adequacy ratio is expected to increase to at least 17.45 percent as a result. To counter the increase in NPLs, credit controls have been centralised and internal processes revised in line with international standards. Credit officers have been retrained and a 'hospital bank' formed to provide financial restructuring for customers with viable businesses who face temporary problems. Experienced staff have been recruited to assist in the NPL resolution process. In addition, a Problem Loan Committee has been formed to review existing and potential NPLs, provide restructuring guidelines and decide on the ultimate course of action. Given the measures taken by TDB, the Thai Government and BOT, NPLs are expected to be contained in 1999 and diminish thereafter.
Efforts have been under way to more meaningfully align the operations of TDB with those of DBS to leverage best practices and facilitate coordination of business policies, customer initiatives and support services. Working with external management consultants, a new organisation structure was announced which more closely aligns TDB with its customer base. The end result is expected to be a bank that is better positioned for the Thai financial services market and better able to address the unique needs of its customer segments, once the crisis has passed.
