Case Study: Royal Bank of Canada in Thailand

This case analyzes the problems facing a bank in a foreign country and the reasons

for deciding to stay or to close its operation. Royal Bank of Canada is the bank

involved in this real life situation.

After closing its representative office in Thailand in the 1980’s Royal Bank of Canada

reentered the country in 1997. “Now” Royal Bank of Canada needs to decide if it

feels confortable enough with the decisions made by the government of Thailand

and the IMF, and the future outlook to stay in the country or if on the other hand, it

should cut its losses and focus its efforts elsewhere.

Your assignment is to:

1. Demonstrate a through understanding of the case by describing in great

detail all aspects of the case

2. Prepare a detail recommendation for senior management recommending to

stay in the country or to leave the country

3. Write a brief summary of major insights that you have gained and lessons

learned from the case

In your presentation you must be sure to provide answers for all these questions or

issues:

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

Thailand?

2. How large is the initial staff for the office and what is the estimated pretax

profit?

3. What are RBC’s four major business lines in its Asia Pacific network?

4. What are the limitations of BIBF licenses?

5. What are the advantages of the possible upgrading of RBC’s operations in

Thailand to a branch status?

6. What are Thailand’s most important exports?

7. What is the “current” (1997) situation in Thailand?

8. What are the highlights of the IMF’s bailout of Thailand?

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 on its efforts elsewhere,

 which means forgetting about getting back in the country in the

 foreseeable future

2 In order for the instructor to verify that all students in the Group have contributed

to the Group’s presentation, students must use the Group-Forum to discuss and

coordinate the assignment, and the Group’s File Exchange to post their individual

participations. The Captain of the Group is responsible for coordinating the

discussions and for posting the Group’s presentation on Blackboard ‘s Assignment

Tool.

For additional details, please see your Syllabus-Assignments, and view the video

Guidelines to Participate in the Forums.

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