Essay on rbc in thailand

912 Words Sep 16th, 2014 4 Pages
Case Study: Royal Bank of Canada in Thailand

1. What were RBC’s ultimate goals in opening a representative office in Thailand?

When RBC opened a representative office in Thailand in the early 1980’s, its ultimate goal was to obtain a full branch license. RBC felt that Thailand had the potential to become a regional financial center, and they certainly wanted to have an established presence in a country with this sort of opportunity. RBC also had the corporate goal of increasing the amount of its business generated from non-Canadian sources. With RBC locations in Asia already accounting for 16% of their total international earning assets, opening a new branch in Asia seemed likely to help achieve the bank’s corporate goal.
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As a result of this arrangement between Thailand and the IMF, the Thai government was required to report its reserves to them every two weeks. This biweekly report was needed to ensure that the Thai government was keeping the minimum required foreign reserve amount laid out by the IMF. Lastly, this agreement did not allow the Thai government to bailout troubled financial institutions by assisting their creditors.

9. As RBC’s representative in Thailand you need to prepare a detailed recommendation for senior management to either:
A. Stay in the country and “weather the storm”, which perhaps means to take losses for an extended period of time
B. Cut your losses now and have the bank focus its efforts elsewhere, which means forgetting about getting back in the country in the foreseeable future.

As RBC’s representative in Thailand I would recommend to senior management that we stay in the country and “weather the storm,” despite the fact that this decision will likely result in losses in the immediate future. The country of Thailand has great economic potential and could possibly become a regional financial center one day. Prior to the economic crisis of 1997, the country of Thailand had seen a decade of continued economic growth and was even considered the world’s fastest growing economy between 1984 and

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