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Financial Market & Institutions Analysis

17 Jun 2022

Financial Institutions

Outlook for Used Car Loans 2022: Opportunity to grow on account of pricing, while rising sales volume limited by a decline in car auctions (Business Brief No.3975)

KResearch assesses that used car loans in the commercial banking system in 2022 are projected to rise to 5-7 percent of total used car loans, approximately THB 300 billion, thanks to the pricing factor as reflected by the Used Vehicle Price Index (UVPI) and intense competition among commercial banks... Read more

1 Apr 2022

Financial Institutions

Household debts set to drop to 86.5-88.5% of GDP in 2022, but financial positions of households will remain weak (Current Issue No.3318)

Outstanding debt of Thai households grew 3.9 percent in 2021, which was on par with that reported for 2020. Due to the slow economic growth, the household debt to GDP ratio in 2021 surged to 90.1 percent, against the 89.7 percent recorded for 2020. The high household debt to GDP ratio is one of the ... Read more

24 Feb 2022

Financial Institutions

Outlook for life insurance business 2022: Opportunity to restore purchasing power in line with economic recovery (Current Issue No.3307)

Life insurance business saw a slight positive turn in 2021, after undergoing a contraction for two consecutive years. This growth can be attributed to increased sales of new insurance policies, particularly single-premium life insurance, while renewal year premium has shown no growth. ... Read more

30 Dec 2021

Financial Institutions

Households Become More Cautious in Assuming Debts Outstanding Household Debts Grew at Slower Rate in 3Q21 (Business Brief No.3961)

The latest report on household lending shows that Thai households continue to incur more debts, albeit at a slower pace in line with economic conditions that are being affected by the COVID-19 pandemic. In 3Q21, outstanding household debts stood at THB14.35 trillion, an increase of approximately 4.2... Read more

23 Dec 2021

Financial Institutions

Commercial Banking Business Set to Face Numerous Challenges amid Omicron in 2022 (Current Issue No.3293)

Uncertainties surrounding COVID-19 are resurfacing during the transition towards 2022 and will not only affect the pace of Thai economic recovery, but also the commercial banking business over the course of next year. If Thailand can effectively control the Omicron variant of COVID-19, commercial ba... Read more

5 Nov 2021

Financial Institutions

MPC Meeting, November 10, 2021: Policy rate likely to remain unchanged at 0.50% amid many positive economic factors (Business Brief No.3957)

KResearch assesses that the Monetary Policy Committee (MPC) will keep its policy rate steady at 0.50 percent in the meeting slated for November 10, 2021, in light of positive economic factors that stem from Thailand’s reopening and continuous easing of lockdown measures. These have benefited the re... Read more

22 Oct 2021

Financial Institutions

Relaxation of LTV regulations to continue until end of 2022... real estate business and home loan will tend to grow, given further easing of COVID-19 (Current Issue No.3280)

On October 21, 2021, the Bank of Thailand (BOT) announced the relaxation of rules for home loan and top-up loan by temporarily lifting the loan-to-value (LTV) ratio to 100 percent, from now until the end of 2022. KResearch views that this relaxation of LTV regulations will help to increase homebuyer... Read more

19 Oct 2021

Financial Institutions

Thai Banks, 3Q21: Net Profits Projected to Decline QoQ due to Impact of COVID-19 on Asset Quality (Business Brief No.3954)

KResearch expects that net profits of domestically-registered commercial banks will reach THB32.5-33.5 billion in 3Q21, declining from the THB57.2 billion reported for 2Q21 because the resurgence of COVID-19 in early 3Q21 may dent their core business income, particularly fees and service income, thu... Read more

1 Oct 2021

Financial Institutions

Steady Growth Seen in 2Q21 Household Debt...More Retail Borrowers Participating in Financial Relief Measures Present Challenge in Accelerating Debt Restructuring (Current Issue No.3274)

According to the Bank of Thailand (BOT)’s latest report on loans extended to households in 2Q21, outstanding household debt increased to THB14.27 trillion, amounting to 89.3 percent of GDP. That figure represents a decline from the 90.6 percent of GDP, its highest in 18 years, reported for 1Q21, bec... Read more

23 Sep 2021

Financial Institutions

MPC Meeting, September 29, 2021: Policy rate likely to be maintained at 0.5% amid signs of improvement in the COVID-19 situation (Business Brief No.3951)

KResearch assesses that the Monetary Policy Committee (MPC) will keep its policy rate at 0.50 percent during the meeting slated for September 29, 2021, following a decrease in the number of daily COVID-19 cases in the country. In its previous meeting in August 2021, the MPC voted 4 to 2 to maintain ... Read more

23 Sep 2021

Financial Institutions

The Baht weakens in response to Fed’s signals of QE Tapering around mid-2022 and Fed Funds Rate Hike (Business Brief No.3950)

At the latest Federal Open Market Committee meeting, September 21-22, 2021,the Federal Reserve (Fed) signaled that it would begin scaling back its asset purchases via the QE measure over the next several months. Concurrently, markets have assessed that there is a higher chance of a Fed Funds rate hi... Read more

22 Sep 2021

Financial Institutions

Higher demand for funds ...affects liquidity and bond yields (Current Issue No.3270)

Since August 2021, the upward trend of Thai bond yields has been one of the major issues that has drawn attention, even though the Bank of Thailand (BOT) still maintains its policy rate at a low level for 2021 and likely into 2022 amid the uncertainty surrounding economic recovery. There are several... Read more

7 Sep 2021

Financial Institutions

Thai Investors’ views on Cryptocurrency Investment Trends (Current Issue No.3264)

Many new investors worldwide were rushing into the cryptocurrency market recently as it offered higher returns than other assets. Retail investors in Thailand were no exception as more of them have flocked to the cryptocurrency market to capture wide gains, though their numbers remain limited. Such ... Read more

6 Sep 2021

Financial Institutions

Assessing the economy based on the financial position of the Thai banking industry (Current Issue No.3263)

The COVID-19 crisis has persisted for almost two years, offering various parties a clearer perspective on multiple issues – whether these are the impacts that stemmed from the pandemic or existing problems in each sector that have been exacerbated by the ongoing outbreak. Many interesting points can... Read more

30 Jul 2021

Financial Institutions

MPC Meeting, August 4, 2021: Policy Rate Likely Maintained at 0.5% amid Increased Economic Risk (Business Brief No.3943)

KResearch assesses that the Monetary Policy Committee (MPC) will likely keep its policy intact at 0.5 percent during the upcoming meeting scheduled for August 4, 2021 to support the Thai economic recovery amid increased risk, stemming from the Delta coronavirus (COVID-19) variant. This highly contag... Read more

29 Jul 2021

Financial Institutions

2Q21 Loans and Deposits Projected to Grow at Slower Pace, Reinforcing Signals of Economic Fragility (Business Brief No.3942)

According to summary statements of assets and liabilities (C.B. 1.1), net loans to customers and accrued interest receivables at 19 domestically registered commercial banks increased approximately THB78.4 billion MoM as of the end of June 2021. Given this, KResearch assesses that loans in the Thai c... Read more

16 Jul 2021

Financial Institutions

Bank Operating Performance 2Q21 Lower net profit compared to previous quarter; increased provisioning in anticipation of prolonged COVID-19 crisis (Business Brief No.3939)

KResearch expects that the overall performance of Thai commercial banks in 2Q21 may see an increase in net profit over-year since the economy was hit by the first wave of COVID-19 in 2Q20. However, net profit in 2Q21 may dip to a mere THB 34.8 billion, against the THB38.7 billion that was registered... Read more

9 Jul 2021

Financial Institutions

Thai Baht continues to weaken… 2H21 trend hinge mainly on COVID-19 risks and Fed’s signal of monetary policy tightening (Business Brief No.3936)

The Baht has weakened rapidly amid heightened risks from the third wave of the COVID-19 pandemic, which tends to be difficult to control as authorities grapple with COVID-19 variants. As a result, the Baht hit a 15-month low at THB 32.73 per USD (during the trading sessions on July 9, 2021). Meanwhi... Read more

21 Jun 2021

Financial Institutions

MPC Meeting on June 23, 2021: Policy rate likely to be held at 0.5% and specific measures to reduce household debts expected to take priority (Business Brief No.3934)

KResearch expects that the Monetary Policy Committee (MPC) will keep its policy rate on hold at 0.50 percent during the meeting slated for June 23, 2021, in order to support Thailand’s economic recovery amid low inflationary pressures. The Thai economy remains fraught with risks from the COVID-19 o... Read more

25 May 2021

Financial Institutions

Rising demand for liquidity in Thai financial system expected in 2021, in the wake of prolonged COVID-19 (Current Issue No.3225)

While the COVID-19 outbreak continues to ravage the country and further delays economic recovery, the Thai financial system will be flush with liquidity demand throughout 2021, thanks to fundraising efforts by the government – which are required to promote spending to support the economy. Concurrent... Read more

7 May 2021

Financial Institutions

Third COVID-19 outbreak boosts growth of mobile banking and e-wallet transactions (Current Issue No.3219)

The COVID-19 outbreak has been a key factor in boosting the growth of mobile banking and e-wallet transactions. A recent survey conducted by KResearch found that Thai consumers generally conduct around 19 funds transfers and/or payments for goods and services per week via mobile banking and e-wallet... Read more

30 Apr 2021

Financial Institutions

MPC meeting on May 5, 2021: Policy rate to be maintained at 0.5% amid heightened risk from new COVID-19 outbreak (Business Brief No.3928)

KResearch expects that the Monetary Policy Committee (MPC) will keep its policy rate steady at 0.50 percent during the meeting scheduled for May 5, 2021 to support economic recovery amid this period of heightened uncertainty. This economic atmosphere stems from the new COVID-19 outbreak which remain... Read more

30 Apr 2021

Financial Institutions

Credit Card Loans, 2021: More Cardholders Make Minimum Payments due to Impact of COVID-19 (Current Issue No.3217)

The credit card business is one of the businesses that has been adversely affected by the COVID-19 pandemic because a credit card serves as a payment tool in lieu of cash, which means that credit card spending and credit card loans tend to decline whenever there is an economic downturn.... Read more

22 Apr 2021

Financial Institutions

Consolidated financial statements of 9 banks in 1Q21 show a boost in net profit from reduced expenses and provisions (Current Issue No.3924)

KResearch has compiled major financial data from the consolidated financial statements of nine commercial banks and their subsidiaries for 1Q21. The latest data reveals that these commercial banks and their subsidiaries recorded a net profit of Baht 46.071 billion, or growth of 47.4 percent QoQ, c... Read more

12 Apr 2021

Financial Institutions

Projected Bank Operating Performance 1Q21: new COVID-19 outbreak continues to raise uncertainties, despite higher profit than the previous quarter (Business Brief No.3921)

KResearch assesses that net profit of domestically-registered commercial banks (Thai banking system) may have inched up during 1Q21. While income from core businesses of commercial banks may have yet to fully recover due to the pandemic’s impact on economic activity across numerous Thai industries,... Read more

1 Apr 2021

Financial Institutions

Digital Banks: Challenges lie in adopting a format appropriate for the Thai context (Current Issue No.3205)

Currently, the trend for digital-only banks (or digital banks) is gaining a lot of traction. Numerous central banks across Asia including Singapore, Malaysia, Taiwan and Hong Kong, to name but a few places, have issued digital banking licenses to applicants. These moves have been made in the hope of... Read more

1 Apr 2021

Financial Institutions

Persistently High Household Debt Seen in 2021 at 89-91% of GDP (Current Issue No.3204)

According to the Bank of Thailand (BOT)’s latest report on loans to household in 4Q20, household debt exceeded THB14 trillion as of the 2020 year-end, which is the highest ever recorded by the BOT in 18 years. This figure amounts to 89.3 percent of 2020 GDP. In terms of growth, outstanding household... Read more

25 Mar 2021

Financial Institutions

Nano-Finance Business, 2021: Recovery Inhibited by Risk and Economic Uncertainty (Current Issue No.3200)

Nano-finance under the supervision is referred to as retail loans for business purposes, which target individuals with no regular income, account statements with banks and assets prescribed as collateral. The nano-finance business contracted during 2019-2020 due to a number of factors. These include... Read more

23 Mar 2021

Financial Institutions

MPC Meeting, March 24, 2021: Policy Rate Will Likely Be Maintained at 0.5% while 2021 Growth Outlook to be Cut Slightly (Business Brief No.3917)

We at KResearch assess that the Monetary Policy Committee (MPC) will likely keep its policy rate steady at 0.50 percent during the meeting scheduled for March 24, 2021 as the government has steadily implemented a series of economic stimulus measures with the aim of easing the impact of a new wave of... Read more

23 Mar 2021

Financial Institutions

Soft loan and asset warehousing… promising options for businesses seeking aid in times of great uncertainty (Current Issue No.3199)

The financial position of Thai businesses, particularly small and medium enterprises (SMEs), remains precarious amid the uncertainties that are hindering economic recovery. Revival of the economy remains subject to progress made in vaccinations, both domestically and internationally; as well as the ... Read more

17 Mar 2021

Financial Institutions

Rising Bond Yields to Increase Public and Private Sectors’ Interest Burden by around THB9.05-10.80 Billion in 2021 (Current Issue No.3197)

Yields on Thai government bonds (bond yields) have risen steadily since the beginning of 2021. For the 10-year Thai government bond, its yield surged to the highest level in two years and eight months, at 2.05 percent, so far this year. We at KResearch assess that the yield on the 10-year Thai gover... Read more

11 Feb 2021

Financial Institutions

Can QE Help Sustain Thai Economic Recovery? (Current Issue No.3187)

Quantitative easing (QE) is a form of unconventional monetary policy, which is typically used by central banks of major countries, including several nations in Asia, in helping address their economic woes after having to cut their policy rates to near zero percent. The details and size of asset purc... Read more

29 Jan 2021

Financial Institutions

MPC Meeting, February 3, 2021: Policy Rate Likely to Remain Unchanged at 0.5% and Close Attention Must be Paid to New Economic Assessment Results to be Released in March (Business Brief No.3911)

KResearch assesses that the Monetary Policy Committee (MPC) may keep its policy rate steady at 0.50 percent during its first meeting of 2021, scheduled for February 3, because the government has just implemented new monetary and fiscal measures. Its spending under the new fiscal stimulus package acc... Read more

27 Jan 2021

Financial Institutions

Asset Quality Problem Remains Major Risk for Financial Institutions in 2021 (Business Brief No.3910)

Based on 4Q20 financial statements of commercial banks, KResearch assesses that non-performing loans (NPLs) in the commercial banking system may reach approximately THB523 billion as of the end of 2020, accounting for 3.16 percent of total loans. For 2021, we are of the view that NPLs will likely tr... Read more

22 Jan 2021

Financial Institutions

Bond Market 2021: Yields may gradually rise after President Joe Biden signals additional economic stimulus (Current Issue No.3181)

Aside from growing risks posed by the new COVID-19 outbreak which may hamper Thailand’s economic recovery in 2021, another important factor that warrants attention is the rising fund raising cost in the Thai bond market early in the year. This situation is partly due to projections regarding the inc... Read more

13 Jan 2021

Financial Institutions

BOT offers borrowers an extension of relief measures... a lifeline to ease financial burdens and counter new COVID-19 outbreak (Business Brief No.3906)

The new COVID-19 outbreak which has dragged on into 2021 continues to affect economic activity that had previously been on the verge of recovery. Such circumstances have further intensified the issues of financial vulnerability, lack of liquidity and deteriorating debt servicing ability among many ... Read more

6 Jan 2021

Financial Institutions

BOT Presses Ahead with Adjustment of Foreign Exchange Market Ecosystem... But Strong Baht Still Supported by Specific Factors (Business Brief No.3905)

Since the start of 2021, major currencies and Asian currencies, including the Chinese Yuan, have continued to strengthen while the greenback has been facing sell-off, pressured by the Fed’s quantitative easing and the US presidential transition. Meanwhile, the Thai Baht’s value has surged past the 3... Read more

30 Dec 2020

Financial Institutions

Hefty Household Debt Likely to Persist in 2021...Helping Borrowers Survive New Wave of COVID-19 Presents Immediate Challenge (Business Brief No.3904)

According to the Bank of Thailand’s latest report on loans to households during 3Q20, Thailand’s household debt remained at a high level and is projected to rise steadily amid weak economic conditions. The household debt to GDP ratio hit a new 18-year high of 86.6 percent in 3Q20, driven by new home... Read more

29 Dec 2020

Financial Institutions

Commercial Banking Business, 2020: Close Attention Must be Paid to New Wave of COVID-19 (Business Brief No.3903)

In 2020, the COVID-19 pandemic has not only dealt a blow to economic activity, but pressured operating results of commercial banks in many ways. KResearch expects that net profit of domestic-registered commercial banks may reach THB144 billion, representing the lowest level in nine years since 2012.... Read more

17 Dec 2020

Financial Institutions

MPC Meeting, December 23, 2020: Policy Rate Likely Maintained at 0.50% after Economy Has Picked Up (Business Brief No.3901)

KResearch expects that the Monetary Policy Committee (MPC) will keep its policy rate steady at 0.50 percent during the meeting slated for December 23, 2020 because there are signs showing steady recovery in the Thai economy after the government implemented measures aimed at stimulating the economy a... Read more

16 Dec 2020

Financial Institutions

Auto hire purchase market 2021: Recovery expected, but asset quality merits close watch (Business Brief No.3900)

Auto hire purchase is another business that has been affected by the COVID-19 pandemic. Its impact on purchasing power consequently affected the outstanding balance of auto loans in 3Q20, causing a slower growth rate at 3.5 percent, as opposed to 7.7 percent in 2019. The slowdown resulted from a dec... Read more