21 Dec 2022
Financial Institutions
In 2022, Thai banks have operated business amid numerous challenges. These include debt resolution for pandemic-stricken borrowers; change from broad-based measures issued by the policymakers in support of financial institutions which provide assistance to borrowers to specific measures which are gradually allowed to expire; and interest rate hikes in line with the policy rate amid the economic recovery. However, Thai banks’ operating performance during the first nine months of 2022 gradually improved from 2021. KResearch projects that the 2022 operating profit (before provisioning and tax) of domestically-registered commercial banks (Thai banks) will increase by 12.4 percent from the previous year, in line with continual loan growth. If combined with lower provisioning expenses compared to those of the previous year which were proactively set aside, net profit of the Thai commercial banking system is expected to reach approximately THB 230 billion, increasing by 34 percent from the previous year.... Read more
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17 Oct 2022
Gradual post-lockdown economic recovery expected to support commercial banks’ income from core businesses in 3Q22…but close attention must be paid to economic uncertainty going forward ... Read more
8 Aug 2022
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
29 Jul 2021
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 commercial banking system may have grown 4.4 percent YoY at the end of 2Q21, against the 4.6 percent YoY pace reported for 1Q21. Although the 2Q21 loan growth may have begun to decline, it would be at a slower rate, supported chiefly by increased corporate loans, plus home loans, especially from customers who still can afford residential units. ... Read more
9 Oct 2020
KResearch assesses that the pandemic-stricken economic environment continued to undermine commercial banks’ profitability in 3Q20, with both interest income and fee income on a declining trend that corresponds to the continuous slump in economic activity across many sectors. Moreover, the interest income of the entire system of Thai commercial banks was further impacted by the downward trend in lending rates, which have been falling since late 2019. KResearch projects that the net profit of the Thai banking system in 3Q20 will fall to an estimated level of THB 30.8 billion, or a drop of 66.5 percent YoY in comparison to a net profit of THB 91.6 billion in 3Q19 wherein one particular bank recorded extraordinary profit through the sale of an insurance company’s shares that the bank had held. Nonetheless, this net profit inched up slightly, by around 3.7 percent, compared to the previous quarter due to lower provisioning expenses for 3Q20 among several commercial banks that may somewhat experienced a slowdown after they pursued a proactive provision policy by setting aside exceptionally high provisioning in 2Q20... Read more
25 Nov 2019
Net loans in October 2019 decreased from the previous month by 87.7 billion Baht amid the pressure on loans at almost all banks, especially from debt repayment by the corporate sector, SME business operators and the government. Nonetheless, retail loans, namely, personal loan and other unsecured loans without collateral, continued to increase due to seasonal factors. Auto hire purchase loan and mortgage loan rose from the previous month, albeit at a slower pace. Consequently, outstanding net loans in October 2019 slowed to 11.702 trillion Baht, an increase of only 2.40 percent YoY – the lowest rate in over two years – and decelerating from 3.92 percent growth YoY in September 2019. The trend is a reflection of poor economic performance, which restrains the recovery of borrowers’ demands to withdraw funds from their loan facility. ... Read more
19 Nov 2019
Digital-only banking is a banking business in the modern age that can be categorized into two types based on business models, which aim at different groups of customers: First, digital-only banks which focus on servicing low to medium income earners who face certain limitations in accessing financial services (Digital-Only A). Second, digital-only banks with customers overlapping with those of commercial banks, and the digital-only banks aim to become an alternative for customers to expedite transactions with lower transaction costs (Digital-Only B).... Read more
18 Jul 2019
We at KResearch project that net profit overall of commercial banks registered in Thailand will reach approximately THB51-52 billion in 2Q19, declining from the THB52.59 billion reported for 1Q19. Operating profit in 2Q10 may recover at a slower pace because income growth from core business of commercial banks, including interest income, plus fees and service income, hinges on a clear economic recovery, which is expected to begin during 2H19.... Read more
14 Sep 2018
We at KResearch are of the view that the Monetary Policy Committee (MPC) will likely keep its policy rate steady at 1.50 percent during the meeting scheduled for September 19, 2018. This is because it may not see the need to raise its policy rate much at this time despite steady improvements in the Thailand economy. Moreover, volatile capital movements and benign inflation may not prompt the MPC to change its stance at the upcoming meeting either. Inflationary pressure is limited especially from the demand side while there are no signs that inflation expectation will increase significantly in the future, so there is no need for the MPC to raise its policy rate in order to curb inflation now. In addition, Thailand’s external stability remains robust; therefore risk of capital flight is low as evidenced by net purchase of foreign investors in the Thai bond market. Given this, a policy hike may only attract more foreign capital into Thailand, thus strengthening the Baht’s value on a par with currencies of our trade rivals. ... Read more
26 Jun 2018
Around 4-5 financial technology start-ups have begun providing Peer-to-Peer Lending (P2P Lending) in Thailand by focusing on retail borrowers, especially SME entrepreneurs. The online lending platform should provide these borrowers with an increased access to finance with a cheaper interest rate because the costs associated with certain lending procedures will be lower when the operation is run by a digital system. Additionally, some platforms are designed to add another layer of price competition mechanism for investors through the online auction process. At the same time, the conditions to request for loans via online platform have also been eased in terms of both collateral and duration of business operations (compared with application for unsecured loans at financial institutions).... Read more
25 Jun 2018
Net loans for May increased to almost the same level as that in April by THB65.9 billion, or 0.59 percent MoM to THB11.20 trillion. When compared to the same period of 2017 and at the end of 2017, May net loans grew 4.99 percent YoY, or 1.27 percent YTD due to the low base of last year. The increase was seen almost across all banks in line with growth in business loans, in particular for large and small businesses. Retail loans were supported by auto hire purchase and home loans.... Read more
26 Mar 2018
Net loans in February 2018 rose THB67 billion over January to USD11.05 trillion, thus rising 0.61 percent MoM and 4.36 percent YoY. Most increases were seen in large business loans, including working capital and term loans, while retail loan growth was mainly driven by auto financing on new and used cars as well as auto refinancing loans. SME loans had recovered gradually to marginal growth, while credit card loans slowed on loan repayments that continued to be brisk from the previous month. During the 2M18 period, loan growth had decelerated versus the end of 2017, but is expected to return to growth again by the end of 1Q18, buoyed by large corporate loan demand for use in their expansion of production capacities in line with the apparent international business recovery. Retail loans will likely perform better after subsiding somewhat on recent credit card paybacks and strong growth in auto loans. Meanwhile, competition in retail loan products presented via mobile banking apps by various banks will no doubt attract many customers soon enough, too.... Read more
4 Jan 2018
泰铢币值从新年开始就升值到接近32.20泰铢兑换1美元的水平，为近3年多来的最高值，与本区域其他币种的走向相一致，同时美元仍未获得明显的支持因素，虽然今年美联储将继续逐渐上调政策利率，不同于泰国政策利率在今年大部分时间内仍将维持1.5%的水平不变。 开泰研究中心认为，泰铢从2018年首几个工作日起就进入升值区间的局势，与资金流入的情况相符，主要因为获利于泰国经济基本面因素强健和看好经济趋向复苏，尤其是经常项目顺差，开泰研究中心预料2018年泰国的经常项目可能连续第三年实现逾400亿美元的顺差。... Read more
1 Jan 1
In April 2018, net loans overall increased 0.61 percent MoM (THB67.8 billion), or 4.81 percent YoY to THB11.14 trillion, as expected. The increase was seen at almost all banks, led chiefly by business loans and retail loans (which include home, hire-purchase and unsecured personal loans). Meanwhile, deposits hit a four-month high of THB12.36 trillion, rising 0.99 percent MoM (THB121 billion), or 6.28 percent YoY. ... Read more