Thailand Banking Industry Report - 2015

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Thailand Banking Industry Report - 2015

This report profiles Thailand’s banking industry, discussing market trends between 2014 and June 2015, as well as the outlook for 2015. The report also highlights leading players in the sector including Siam Commercial Bank PCL, Bangkok Bank PCL, Kasikorn Bank PCL, Krung Thai Bank, and Bank of Ayudhya PCL.

The stability of Thai commercial banks was maintained in 2014, despite showing a little slack due to the internal political unrest as well as slight deterioration in the quality of consumer loans and a decrease in lending growth. Yet, 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; and high provisions and capital fund that help cushion economic volatility.

Total assets held by financial institutions in Thailand stood at THB 22.57tn as of July 2015, up 4.8% y/y. Commercial banks represented 75.1% of the banking industry, with Bangkok Bank remaining the key dominant player in terms of total assets. Meanwhile, banking loans growth dropped to 4% in Dec 2014, compared to 9% in Dec 2013. The growth mostly stemmed from SMEs loan expansion, while consumer loans grew at a slower rate in line with lower economic growth, which prompted loan-to-deposit ratio to decline to 108.5% in June 2015, from 111% in the same period last year. Nonetheless, banks generally have had ample buffer capital for expected losses as capital ratios remained strong in 1H/2015, 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 2015 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. However, downside risks stem from delays in government investment and asset quality deterioration due to the slow recovering economy.

Key Points:

• The Thai banking system recorded lower net profit of THB 53.5bn and ROA of 1.3% in Q2/2015 while capital position still remained high.

• Loan quality slightly deteriorated, evidenced by a marginal increase in NPL ratio to THB 311.6bn or 2.38% in June 2015.

• In 2015, big banks should outperform small banks in terms of loan and earnings growth, while most banks should report higher 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)
2.3 Industry Consolidation
2.4 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
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 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 17 Domestic Banks in Thailand
Chart 9: Total Loans and Growth Rate
Chart 10: Loan Disbursements by Sector
Chart 11: Growth Rate of Outstanding 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: 33
Release Date: Mon, 05 Oct 2015