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
26 Jul 2022
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. Meanwhile, Thailand’s total outstanding value of sustainability debt instruments in the second quarter of 2022 was THB 330,049 million – these were mainly sustainability government bonds, followed by green bonds for energy projects. KResearch projects that there will be issuances of sustainability debt instruments worth THB 76,000 million in 2022, or 12.1-percent growth from 2021, in alignment with economic expansion. However, in the next two to three years, the tighter monetary policies of central banks worldwide, including Thailand, will result in slowing expansion of debt instruments. Meanwhile, in the long term, renewable energy policies and the support of financial regulatory agencies will be major factors which will drive the increasing popularity of sustainability debt instruments.... Read more
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
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 and net interest margin (NIM) increased slightly in line with loan growth. ... Read more
7 May 2021
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 applications. This is a higher rate of usage than during the first outbreak, wherein the number of transactions averaged 17 per week. At the same time, 53.9 percent of consumers reported increased usage. ... Read more
12 Apr 2021
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, the banks’ net profit for 1Q21 could potentially rise by 75 percent QoQ. This possible increase can be attributed to reduced operating expenses and expected credit loss (which remain higher than pre-pandemic levels).... Read more
13 Jan 2021
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 groups of debtors. The Bank of Thailand (BOT) recently extended the period for retail borrowers to register for financial assistance from now until June 2021. Financial institutions have also been urged to expedite the issuance of relief measures to every group of debtors appropriate for their specific loan, taking into account the debtors’ risks. ... Read more
6 Jan 2021
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 30-per-Dollar mark; therefore the Baht’s appreciation is an issue that warrants close attention and the Bank of Thailand (BOT) has pressed ahead with the relaxation of related regulations further in a bid to adjust balance in the foreign exchange market ecosystem.... Read more
29 Dec 2020
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
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
1 Sep 2020
KResearch views that the ongoing COVID-19 pandemic is an important catalyst in transforming the way Thai consumers conduct funds transfer and pay for goods and services. Such trends have given rise to the “New Normal” which is geared towards making money transfers and purchases that do not require physical contact, or contactless payment. Based on surveys conducted by KResearch... Read more
23 Jul 2020
KResearch assesses that, as of 2020, digital lending service in Thailand is still in its infancy and modest in scale as digital lenders lack sufficient customer data for risk profile assessment. Therefore, digital lending service during this initial period is seen mainly as an alternative for existing borrowers. Digital credit providers tend to grant short-term loans (1-3 months on average) with small credit lines and at high interest rates. These loans are suitable for general customers seeking emergency cash for consumption, or micro enterprises that need emergency funding as working capital for their businesses. ... Read more
20 Jul 2020
Persistent weakness seen in the Thai economy as a result of the coronavirus (COVID-19) pandemic since early 2020 has substantially hurt the profitability of commercial banks during 2Q20. The highly volatile economic cycle at this time has pressured income of commercial banks’ core businesses and in turn driven up their expected credit losses to a higher-than-normal level.... Read more
29 May 2020
The coronavirus (COVID-19) pandemic has altered the business environment of commercial banks in two ways: 1) The speed of disruption has become faster; and, 2) There has been a “New Normal” environment in the commercial banking business. Such changes have inevitably affected business model of commercial banks. ... Read more
8 Apr 2020
On 7 April 2020, the Bank of Thailand (BOT) issued additional measures to assist the private sector in combating the COVID-19 which primarily concern short-term liquidity boosting measures offered to small to medium enterprises (SMEs) that have been affected by the spread of the COVID-19 virus – a global crisis which has tended to only increase in severity and is likely to take some time to be resolved. Furthermore, the BOT has issued additional measures to maintain the stability of the corporate bond market as a means of fund mobilization via debenture issuance, allowing high-grade businesses to continue their operations. ... Read more
16 Aug 2019
New reports over the past one month may represent signals confirming that the Bank of Thailand (BOT) is in the process of carrying out two important matters to cope with hefty household debt. These include: 1) determining lending guidelines for low-income earners; and 2) preparation to set common lending standards, based on the debt service ratio (DSR). Such details will likely be announced by the BOT soon.... 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
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
23 Mar 2018
We at KResearch expect that the Monetary Policy Committee (MPC) will likely keep its policy rate unchanged at 1.50 percent during the second meeting of 2018 scheduled for March 28 to ensure continuing growth in the Thai economy going forward amid a number of external risks, in particular a possible US-China trade war. The current inflation rate, which remains at the lower band of the Bank of Thailand’s inflation target, will also support the MPC to continue its accommodative monetary policy stance. ... Read more