21 Nov 2022
Financial Institutions
The Monetary Policy Committee (MPC) began raising its policy rates at the August and September 2022 meetings by 0.25 percent each, bringing the current policy rate to 1.00 percent. However, most large commercial banks did not hike their interest rates immediately and waited until October 2022, particularly deposit rates. A substantial increase has been seen in the launch of special deposit campaigns, chiefly by large and small commercial banks. Such campaigns have been introduced at an accelerating pace although they are intended to replenish deposits that have reached or are scheduled to reach maturity. ... Read more
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27 Jul 2022
Impacts on the Thai banking system if banks defer interest rate increase ... Read more
19 Oct 2021
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, thus causing them to incur higher provision expenses than those seen during a normal period and in 1H21. ... Read more
22 Jun 2020
The Bank of Thailand (BOT) is forging ahead with its Phase II package of relief measures for small borrowers, which will emphasize relieving the financial burden of retail debtors by lowering the interest rate ceiling on credit cards and personal loans, as well as cutting the interest rate for refinancing debts into long-term loans. ... Read more
17 Oct 2019
Although 3Q19 earnings of Thai commercial banks show that the Thai commercial banking system overall has been able to maintain profitability from extraordinary items, cut expenses from setting aside reserves and undertake efficient cost management, KResearch has assessed that the sluggish Thai economy will continue to pressure growth of their core business income, in particular net interest income. We expect that net interest income will increase slightly by approximately 0.7 percent YoY in 3Q19, pressured by decelerated loan growth, declines in MRR and MOR, plus interest expenses after many commercial banks raised interest rates for fixed deposits and some savings deposits during 1H19. ... Read more
26 Sep 2019
Net loans of commercial banks (14 banks) in August 2019 increased only 3.84 percent YoY, the same growth as the rate registered in July 2019, which is the lowest rate in 21 months. Loan outstandings continue to slow in alignment with the overall economic sentiment. In particular, business loans are under pressure from debt repayment, while newly-approved loans expanded within a limited range. Moreover, the bond yield of the Thai market has steadily declined. Hence, the issuance of corporate bonds is an option for medium and large companies to raise funds with low cost. Even though retail loans sustain their growth, the housing loans and auto hire purchase loans decelerated due to a high base effect in the previous year. Additionally, buyers’ demands in the property and auto markets were mostly absorbed earlier. ... Read more
25 Apr 2019
Net loans in March 2019 expanded from the previous month but the increase fails to lift the overall loans in 1Q19 back to positive territory. Net loans declined by 0.11 percent compared to the outstanding loans at the end of 2018, attributable chiefly to a steady drop of corporate and SME loans of some large commercial banks, including commercial manufacturing industry, utilities and services, as well as real estate businesses. There are factors propping up retail loans through the entire quarter, especially housing loans because customers have hastily transferred the property ownership before the Bank of Thailand’s loan-to-value measures take effect from April 1, 2019. Moreover, the auto hire purchase loans increased in accordance with new car sales. Consumer loans also rose due to aggressive marketing campaigns by service providers via digital channels and others to penetrate each individual customer. These factors have cushioned the fall during the season of credit card loan repayment period.... Read more
26 Mar 2019
Net loans accelerated in February, supported by key retail loans, i.e. home and auto hire-purchase loans, in line with growing loan demand as a result of short-term factors. These include higher number of home ownership transfers before the enforcement of a new home loan measure on April 1, 2019 and continuing growth seen in car sales since late 2018. Meanwhile, unsecured loans overall continued to be inhibited by debt payments. As a result, February net loans increased THB30 billion or 0.26 percent over the previous month while corporate and SME loans grew slightly at several banks. However, February net loans declined THB30 billion when compared to that reported at the end of 2018, partly because of the business sector’s direct fund mobilization via debenture issuance of over THB100 billion during the first two months of 2019. Of that total, some debentures were issued to replace maturing debentures while over THB25 billion worth of debentures were issued for debt payments to financial institutions and business expansion. ... Read more
26 Feb 2019
KResearch summarizes the information about loans, deposits and financial liquidity at 14 Thai commercial banks as of the end of January 2019 based on the Summary Statement of Assets and Liabilities with highlights as follows: ... Read more
31 Jan 2019
Thai Baht has surged to THB31.23/USD or up 4.4 percent from the beginning of this year due mainly to a weaker US dollar. The movement of Thai Baht was in alignment with other currencies in the region. However, from the beginning of this year, the Thai currency hit a record high in nine months and became the second-best performer in the region after Indonesian Rupiah on the back of dollar downsize and the Federal Reserve’s hints that the interest-rate increases may be put on hold, resulting in a selloff of the greenback. ... Read more
6 Aug 2018
KResearch expects that the Monetary Policy Committee (MPC) will resolve to maintain their policy rate at 1.50 percent during the fifth meeting of 2018 slated for August 8 to ensure that the recovery is seen across all economic sectors and inflation moves toward to its set target. It must be noted that many central banks in Asia, along with the Bank of England and Bank of Canada have already raised their policy rates this year; therefore, it is quite clear that interest rates globally are on the upward trend. For Thailand, there are not many factors pressuring the MPC to hike their policy rate because domestic inflation is relatively low, moving below the mean of inflation target rate, and Thailand’s current account surplus remains high, meaning that capital outflows and the Baht’s appreciation may not have significant impacts on the Thai economy. As a result, the MPC will likely attach importance to domestic economic factors when implementing their monetary policy going forward.... Read more
25 Jul 2018
Net loans overall for June increased over the previous month by THB106 billion to THB11.31 trillion, or 0.95 percent MoM, the highest level in 1H18. When compared to the same period of 2017 and at the end of 2017, June net loans grew 5.02 percent YoY, or 2.23 percent YTD, chiefly at large banks in line with increases in corporate and retail loans while SME loans continued to decline at several banks. ... 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
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