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Financial Market & Institutions Analysis

3 Oct 2022

Financial Institutions

Household debt dropped to 88.2 percent of GDP in 2Q22… Households avoid incurring large debts, but still use unsecured loans to enhance short-term liquidity (Current Issue No.3349)

Outstanding debt of Thai households rose to THB 14.76 trillion in 2Q22. However, when compared to economic value, the household debt to GDP ratio in 2Q22 dropped to 88.2 percent, against the 89.2 percent recorded for 1Q22. Additionally, when compared to the same period of last year, the household de... Read more

27 Sep 2022

Financial Institutions

2022 Policy rate will likely be raised by 0.25 percent to 1.00 percent amid pressure from the weakest Baht in 16 years (Business Brief No.3979)

The Monetary Policy Committee (MPC) is expected to raise its policy rate by 0.25 percent to 1.00 percent at its upcoming meeting amid increased inflationary pressure and steady depreciation of the Baht. As previously signaled, the MPC may gradually speed up its policy rate hikes amid the fragile rec... Read more

21 Sep 2022

Financial Institutions

Thai Baht sinks to a new 16-year low, pressured mainly by strong US dollar (Current Issue No.3347)

The Thai Baht recently tested the THB37.20/USD level, its new low in almost 16 years since October 2006, amid the US Federal Reserve (Fed)’s hawkish signals of further rate hikes. However, the Baht’s movements have been in alignment with the Yuan and other regional currencies since the beginning of ... Read more

13 Sep 2022

Financial Institutions

Digital Personal Loan … Lenders are in the early stage of learning and adjusting their businesses (Current Issue No.3343)

KResearch views that digital personal loan market, according to the Bank of Thailand’s guidelines on the use of alternative data for credit analysis in loan approval process, is likely to see “gradual growth” for 2022. As evidenced, digital personal loan outstanding is at approximately THB 7.92-8.5 ... Read more

8 Aug 2022

Financial Institutions

MPC meeting, August 10, 2022 Policy rate will likely be raised by 0.25% to 0.75% amid increased inflation pressure and brighter outlook for the Thai economy (Business Brief No.3977)

It is expected that the Monetary Policy Committee (MPC) will raise its policy rate by 0.25 percent to 0.75 percent at the upcoming meeting. Amid increased inflationary pressure and steady recovery seen in the Thai economy, the MPC may gradually speed up its policy rate hikes ahead. ... Read more

26 Jul 2022

Financial Institutions

Outlook for Sustainable Finance (Current Issue No.3336)

Sustainable finance has seen rapid growth worldwide. In 2021, sustainability debt instruments were valued at USD 929,700 million, or 10x growth over the past five years, while sustainability loans amounted to USD 716,561 million, or 7x growth from 2018. ... Read more

15 Jul 2022

Financial Institutions

Thai commercial banks, 2H22: Supervision of fragile debtors needed as interest rates are set to increase (Current Issue No.3331)

We at KResearch assess that core business income of commercial banks in Thailand remained weak during 2Q22. Particularly, their non-interest income was pressured by murky economic conditions, while volatility in the capital market also hurt their investment portfolios. However, net interest income a... Read more

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

13 Jun 2022

Financial Institutions

Debenture market 2022: Growing amid upward trend in interest rates while issuance of long-term debentures set to reach THB1.10-1.20 trillion (Business Brief No.3972)

KResearch assesses that monetary policy tightening attempts by the US Federal Reserve (Fed) and other leading central banks in the West and Asia (with the exception of the People’s Bank of China and Bank of Japan) will become more consistent during 2H22. Central banks that are expected to raise thei... Read more

2 Jun 2022

Financial Institutions

Policy rate will likely be maintained at 0.50% as economy remains fragile, but policy rate hike may begin in 4Q22 (Business Brief No.3971)

It is expected that the Monetary Policy Committee (MPC) will keep its policy rate steady at 0.50 percent at the upcoming MPC meeting, with the aim of supporting the economy that has yet to fully recover. However, the MPC will continue to experience more challenges in maintaining its accommodative mo... 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 Mar 2022

Financial Institutions

Trend for auto title loan in 2022: Tapping into the low-end market (Business Brief No.3967)

Auto title loan saw high growth amid the COVID-19 crisis. The number of loan accounts increased by around 50 percent to 4.20 million accounts, with total outstanding loan rising 45 percent to a total of THB181 billion at the end of 2021, compared to the end of 2019. Meanwhile, non-performing loans ... 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