Thailand Banking Industry Report - 2014

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Thailand Banking Industry Report - 2014

This report profiles Thailand’s banking industry, covering market data and trends all the way through June 2014. The report also highlights leading players in the sector including Siam Commercial Bank PCL, Bangkok Bank PCL, Kasikorn Bank PCL, Krung Thai Bank PCL, and Bank of Ayudhya PCL.

The operating performance of Thai commercial banks as a whole in 2013 expanded, despite showing a little slack from the previous year due to the internal political unrest and lower than expected economic growth because of the deceleration in investment and consumption. Thai commercial banks have been growing steadily because of the expansion of up-country provinces economy and urbanization trend; the investment to support business opportunity in the upcoming AEC market in 2015; and the first car tax rebate measure that continued to the first half of 2013.

Total assets held by financial institutions in Thailand stood at THB 14.14tn as of April 2014, an increase of 5.9% y/y. Commercial banks represented 75.9% of the banking industry, with Bangkok Bank remaining the key dominant player in term of total assets. Meanwhile, banking loans grew by 5.3% y/y to THB 12.42tn as of March 2014. This increase mostly stemmed from SMEs loan expansion, although at a slower rate in tandem with economic contraction which prompted loan-to-deposit ratio to decline to 109.6% in March 2014, from 113.4% in the same period last year. Nonetheless, banks generally have had ample buffer capital for expected losses as capital ratios remained strong in Q1/2014, signifying a solid financial position for banks in Thailand.

Going forward, credit card lending will continue to register strong growth as a result of aggressive card promotional campaigns. Also, further consolidation is expected amongst the domestic financial institutions to enhance efficiency amid intense competition. Commercial banking business in 2014 is expected to continue to fare well with the distinctiveness of stability, strong capital funds and sound asset quality. However, downside risks stem from delays in government investment and fragile confidence within the private sector.

Key Points:

• The Thai banking system recorded a higher net profit of THB 50.5bn and ROA of 1.26% in Q1/2014 with strong capital position and assets in good level.

• Loan quality slightly deteriorated, evidenced by a marginal increase in non performing loan (NPL) ratio to THB 280bn or 2.3% in Q1/2014.

• In 2014, big banks should outperform small banks in terms of loan and earnings growth, while most banks should report higher net interest margin (NIM) on lower funding costs.

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 Small and Medium Enterprises (SMEs)
2.2 Banking Regulations

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

4. 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 Financial Highlights
Table 5: BBL Financial Highlights
Table 6: KBANK Financial Highlights
Table 7: KTB Financial Highlights
Table 8: BAY Financial Highlights
Table 9: Selected Peer Comparison of Key Financial Ratios

Chart 1: Thailand’s GDP and Loan Growth (Current Prices)
Chart 2: Thailand’s Commercial Bank Loan Growth
Chart 3: Thailand’s NPL Consumer and Corporate
Chart 4: Thailand’s Banking Sector Performance
Chart 5: Number of Commercial and Specialized 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 16 Domestic Banks in Thailand
Chart 9: Total Gross Loans and Growth Rate
Chart 10: Loan Disbursements by Sector
Chart 11: Growth Rate of Commercial Bank Loans
Chart 12: Commercial Banks' Total Deposits
Chart 13: Loan-to-Deposit Ratio
Chart 14: Overnight Policy Rate
Chart 15: Commercial Banks' Minimum Lending Rate
Chart 16: Commercial Banks' Capital Ratios
Chart 17: Banking System's Non-Performing Loan Ratio
Chart 18: Credit Card Spending Value
Chart 19: Credit Cards Account Growth Rate
Chart 20: Credit Card Loans Outstanding
Chart 21: SCB Loan Loss Coverage and NPL Ratios
Chart 22: SCB Loan and Deposit Growth
Chart 23: BBL Asset Growth
Chart 24: KBANK Total Loans and Deposits
Chart 25: KTB Total Loans and Deposits
Chart 26: BAY Loan and Deposit Growth

Number of pages: 35
Release Date: Fri, 18 Jul 2014