As the Association of South-east Asian Nations (Asean) region prepares for economic integration ahead of the 2015 deadline, it is clear that the region’s banks have gone from strength to strength, especially considering their performance just 14 years ago, during the 1998 Asian financial crisis.
In 1998, Thailand was at the epicentre of the Asian financial crisis, following the collapse of its currency in 1997; however, it was Indonesia’s banks that suffered the most out of the Asean banks during that period.
While Thailand was affected badly by the crisis – its return on capital (ROC) hit -68.98% in 1998 and decreased even further in 1999 to -91.05% – its decline was nothing compared to Indonesia's. Indonesia saw its ROC drop to -6559.84% in 1998. This figure recovered in 1999, but still stood at a catastrophic -185.98%. Its performance in these years was literally off the scale, and the real figures could not be included in the chart.
By the end of 2011, Thailand's ROC had recovered to 21.38% but this was still below the 22.15% ROC that the country recorded 20 years earlier in 1991. The strongest recovery was in Indonesia, the country that had seen its performance decline most drastically during the crisis. In 2009, Indonesia’s banks recorded a ROC of 24.16% and in 2010 the figure increased to 33.20%. ROC declined slightly in 2011 to 32.97%, but this was still considerably higher than it had been in 1991, when Indonesia's ROC stood at 21.01%.
For the full story, please see: Asean over 20 years: Indonesia's triumph over adversity
