Rbc Case Study

655 Words Aug 21st, 2015 3 Pages
1. What were RBC’s ultimate goals in opening a representative office in Thailand?
The RBC’s ultimate goal was to attain a full branch license to operate in Thailand. They also wanted to effectively compete in the Thai sector they needed to enter using the BIBF format. This would give them the ability to increase presence and to demonstrate commitment to both regional and multinational clients.

2. How large is the initial staff for the office and what is the estimated pretax Profit?
The banks intent was to commence with a staff of five people. The general manager was the most experienced banker of the five and he was chosen from the RBC network. The other four were employees that were hired locally. They encompassed of
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Local presence, combined with the ability to secure collateral, provided an opportunity to develop relationships with a much broader prospective client base than could be achieved from abroad.

6. What are Thailand’s most important exports?
Thailand’s most important exports were manufactured goods. It accounted for 81% of exports. These included clothing, electronic parts and components, furniture and jewelry.

7. What is the “current” (1997) situation in Thailand?
In 1997 the country’s exports were no longer booming and the Thai economy entered a unsafe and unpredictable phase. Foreign investors were skeptical about the current-account deficit and the big loans property developers. Bad debt continued to mount up and the stock market crashed to depths not seen in eight years. This caused the baht to fall prey to speculative attack. High debt, heavy borrowing, large current account deficit, and the semi-fixed exchange rate system all played a part to the Thai crisis.

8. What are the highlights of the IMF’s bailout of Thailand?
On August 5, 1997 the government of Thailand announced it had reached an agreement with the International Monetary Fund (IMF). The reform included the closing of another 16 finance firms, in addition to the 42 finance firms that were suspended earlier in that year. These firms were asked to merge with banks and other companies or submit other rehabilitation plans. This package

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