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Thailand Banking Industry Report - 2016

  • October 2016
  • -
  • Emerging Markets Direct Media Holdings
  • -
  • 32 pages

This report profiles Thailand’s banking industry, discussing market trends through the first half of 2016 and outlook for 2016 and beyond. The report also highlights leading players in the sector including Siam Commercial Bank (SCB), Bangkok Bank (BBL), Kasikorn Bank (KBANK), Krung Thai Bank (KTB), and Bank of Ayudhya (BAY).

Thailand’s banking system’s performance remained resilient in the first half of 2016 with high levels of loan loss provision and capital fund to facilitate credit expansion and economic recovery going forward. The Bank of Thailand (BOT) expects the economy’s 2016 GDP growth at 3.2%, a slight recovery from 2.8% last year thanks to government infrastructure investment and stimulus measures.

Total assets held by financial institutions in Thailand stood at THB23.54tn as of July 2016, up 3.5% y/y. Commercial banks represented 74.6% of the banking industry, with Bangkok Bank remaining the key dominant player in terms of total assets. Meanwhile, banking loans growth grew by 4.9% in Jun-2016, compared to 3.7% in Dec-2015. The growth mostly stemmed from financial business, services and construction, while consumer loans growth continued to decline in line with slow economic recovery. Loan quality continued to deteriorate as non-performing loans (NPL) increased, resulting in NPL ratio of 2.72% in Jun-2016, up from 2.38% in the same period last year. Nonetheless, banks generally have had ample buffer capital for expected losses as capital ratios remained strong in the first half of 2016, signifying a solid financial position for banks in Thailand.

The outlook for Thailand’s banking system remains stable and growth forecast steady for the next 12-18 month period, reflecting banks’ strong loss-absorption buffers, according to market analysts. However, weak economic growth and asset quality deterioration will remain in the system’s key operating challenge. Commercial banking business is expected to continue to fare well with the distinctiveness of stability, strong capital funds and a boost with the Thai government’s stimulus package.


Key points:

- The Thai banking system recorded lower net profit of THB50.9bn and steady ROA of 1.2% in H1/2016 while capital position still remained high.

- Loan quality deteriorated, evidenced by an increase in NPL ratio to 2.72% in June 2016, from 2.38% a year ago.

- In 2016, banks should further see pressure on their loan incomes from lending rate cuts; nevertheless, their increasing success in developing non-loan income will help sustain their profits to meet credit costs.

Table Of Contents

Thailand Banking Industry Report - 2016
Table of Contents

1. Industry profile
1.1 Sector overview
1.2 Sector size and value
1.2.1 Total assets
1.2.2 Total loans and deposits
1.2.3 Interest rates
1.3 Sector performance
1.3.1 Banking profit and loss
1.3.2 Capital adequacy ratio (CAR)
1.3.3 Non-performing loan (NPL) ratio
2. Market trends and outlook
2.1 Credit card business
2.2 Government stimulus
2.3 Regional expansion
2.4 Banking regulations
2.5 Outlook
3. Leading players and comparative matrix
3.1 Leading players
3.1.1 Siam Commercial Bank PCL (SCB)
3.1.2 Bangkok Bank PCL (BBL)
3.1.3 Kasikorn Bank PCL (KBANK)
3.1.4 Krung Thai Bank PCL (KTB)
3.1.5 Bank of Ayudhya PCL (BAY)
3.2 Comparative matrix
3.3 SWOT analysis


Tables and Charts
Table 1: Commercial banking institutions in Thailand
Table 2: Interest rates in Thailand
Table 3: Net profit of nine largest Thai commercial banks
Table 4: SCB key financial ratios and targets
Table 5: BBL key financial ratios
Table 6: KBANK key financial ratios
Table 7: KTB key financial ratios
Table 8: BAY key financial ratios
Table 9: Selected peer comparison of key financials


List of charts
Chart 1: Thailand's GDP and loan growth
Chart 2: Thailand's commercial bank loan growth
Chart 3: Thailand's non-performing loan
Chart 4: Thailand's banking sector performance
Chart 5: Number of commercial bank branches
Chart 6: SET banking index relative to SET index
Chart 7: Total assets by types of financial institutions
Chart 8: Total assets of ten largest domestic banks in Thailand
Chart 9: Commercial banks' total loans and growth rate
Chart 10: Loan disbursements by sector
Chart 11: Commercial banks' total deposits
Chart 12: Loan-to-deposit ratio
Chart 13: Overnight policy rate
Chart 14: Commercial banks' minimum lending rate
Chart 15: Commercial banks' capital ratios
Chart 16: Banking system's non-performing loan ratio
Chart 17: Credit card spending value
Chart 18: Credit cards account growth rate
Chart 19: Credit card loans outstanding
Chart 20: SCB non-performing loans and ratio
Chart 21: SCB total loans and deposits
Chart 22: BBL non-performing loans and ratio
Chart 23: KBANK non-performing loans and ratio
Chart 24: KTB total loans and NPL ratio
Chart 25: BAY total loans and NPL ratio

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