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Financial Market & Institutions Analysis

5 Aug 2019

Financial Institutions

MPC Gives Weight to Risks to Financial System Stability While Making Economic Assessment (Business Brief No.3812)

KResearch projects that the Monetary Policy Committee (MPC) will keep its policy rate steady at 1.75 percent at the fifth meeting of 2019 slated for August 7, 2019. It is expected that the MPC will attach importance to long-term stability at the upcoming meeting as it is experiencing more challenges... Read more

25 Jul 2019

Financial Institutions

Fed meeting on July 30-31, 2019 is expected to cut interest rate to sustain the US economic recovery (Business Brief No.3810)

KResearch expects the US Federal Reserve to cut the interest rates by 0.25 percent percentage point from 2.25-2.50 percent to 2.00-2.25 percent. Moreover, the Fed is likely to announce to end the balance sheet reduction before the initial schedule to ensure the continuity of the US economic expansio... Read more

18 Jul 2019

Financial Institutions

Unfavorable Core Business Income Continues to Inhibit 2Q19 Profit of Commercial Banks (Current Issue No.3008)

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 comme... Read more

15 Jul 2019

Financial Institutions

BOT issues measures to monitor short-term capital inflow Reduce channels for parking money to curb rapid gains of Thai Baht (Current Issue No.3007)

The Bank of Thailand (BOT), on July 12, 2019, issued the measures to enhance short-term capital flow surveillance under the measures to prevent Thai Baht speculation formally announced after the central bank had earlier sent signal and expressed concerns over the rapid gains of Thai Baht which had s... Read more

25 Jun 2019

Financial Institutions

Short-term corporate loans push net loans in May 19 up by almost THB90 billion over-month, highest jump this year. (Business Brief No.3807)

Bridge loans and working capital loans for corporate accelerated in May while retail loans in almost every category, especially auto loans as well as secured and unsecured personal loans, continued to increase. Hence, the net loans of 14 Thai commercial banks as of the end of May 2019 rose by almost... Read more

20 Jun 2019

Financial Institutions

MPC meeting on Jun 26 is expected to keep policy rate unchanged…amid concerns over stability of monetary system (Business Brief No.3805)

KResearch expects Thailand’s Monetary Policy Committee (MPC) to keep the policy rates unchanged at 1.75 percent during its fourth meeting of 2019. The MPC is likely to weigh risk factors to financial stability in its monetary policy. In particular, household debts further accelerated in the first q... Read more

7 May 2019

Financial Institutions

Roles of ATMs amid Transition Towards Cashless Society Needed to be Recognized (Current Issue No.2987)

In 2018, the number of ATMs and electronic devices used in the commercial banking system contracted 0.98 percent YoY, against the 5.17 percent growth reported for 2017, representing the first shrinkage in 35 years. Such a contraction was consistent with the substantial increase in the number of fina... Read more

30 Apr 2019

Financial Institutions

MPC Meeting, May 8, 2019: Policy Rate Likely on Hold Pending Economic Development (Business Brief No.3800)

We at KResearch expect that the Bank of Thailand’s Monetary Policy Committee (MPC) will likely keep its policy rate intact at 1.75 percent during the third meeting of 2019 pending an assessment of Thai economic development and results of the implementation of macro-and micro-prudential monetary poli... Read more

25 Apr 2019

Financial Institutions

The Baht Weakens Past THB32.00/USD Again…Regional and Political Factors May Pressure Thai Currency Ahead (Current Issue No.2985)

The Baht weakened past THB32.00/USD, moving within a range of THB32.02-32.09/USD on April 25, 2019, representing the weakest level since the beginning of 2019 and declining by approximately 1.5 percent from that reported one month ago. The softening Thai currency was consistent with cautious stance ... Read more

25 Apr 2019

Financial Institutions

Net loans in March 2019 increase MoM… but 1Q19 sees bearish sentiment which persists from late 2018 due to business loan repayment (Business Brief No.3798)

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 s... Read more

12 Apr 2019

Financial Institutions

Auto loan control measures …enhance long-term financial stability for businesses and borrowers (Current Issue No.2981)

The Bank of Thailand recently sent a warning about increasing risks associated with auto loans due to competitive tactics by some banks in collaboration with some auto companies and car dealers to approve loan amount beyond the collateral value. For example, they did not deduct the discount the cust... Read more

5 Apr 2019

Financial Institutions

Reduction in Funds Transfer Fee via Digital Channels Continued to Pressure NIM of Thai Commercial Banks in 1Q19 (Current Issue No.2977)

The cancellation of funds transfer fee via digital channels was the main factor that continued to pressure operating results of Thai commercial banks during 1Q19. It is expected that their fees from other transactions, in particular insurance brokerage, management and advisory fees, may grow at a sl... Read more

26 Mar 2019

Financial Institutions

February Retail Loans Driven by Short-Term Factors (Business Brief No.3795)

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... Read more

26 Feb 2019

Financial Institutions

Net loans in Thai commercial bank system in Jan 2019 decelerate during the business loan repayment season (Business Brief No.3790)

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

Financial Institutions

Thai Baht surges past THB31.25/USD as weaker greenback continues to pressure Thai currency (Current Issue No.2962)

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 be... Read more

31 Jan 2019

Financial Institutions

MPC meeting on Feb 6 is likely to keep rate unchanged, while future rate hike depends on economic situation (Business Brief No.3786)

KResearch expects the Bank of Thailand’s Monetary Policy Committee (MPC) to keep the policy rate unchanged at 1.75 percent during the upcoming meeting after it raised policy rate by 0.25 percentage point on December 19, 2018. Since the Thai GDP growth begins to show signs of slowdown, the... Read more

31 Jan 2019

Financial Institutions

Stringent Control on Lenders Taking Car Registration Book as Collateral Set Clear Standards to Protect Consumers (Business Brief No.3785)

Over the past few years, the Bank of Thailand (BOT), Ministry of Finance and other relevant agencies have gradually introduced notifications and/or regulations to supervise various types of retail loans. Their attempts are intended to set clear scopes and conditions for related businesses, as well a... Read more

29 Jan 2019

Financial Institutions

Robust Net Loan Growth Seen at 2018 Yearend, Driven by Retail Loans (Business Brief No.3784)

In December 2018, net loans overall grew over the previous month by THB118 billion, or 1.03 percent MoM. As a result, net loans for 2018 increased 5.17 percent YoY, with net outstanding loans outstanding at THB11.63 trillion. Growth was seen in all types of loans, led by retail loans. Meanwhile, out... Read more

4 Jan 2019

Financial Institutions

Fixed deposit rate hike is in line with the BOT signal on policy rate increase and the banks’s attempt to maintain their market shares. (Current Issue No.2952)

The uptrend of interest rate is ultimately evident by commercial banks’s decisions to raise their interest rates by starting from deposit rates. Their fixed-deposit rates for three, six, 12, 24 and 36 months are raised by 25 basis points. Hence, the fixed deposit rates of some major commercial banks... Read more

26 Dec 2018

Financial Institutions

Credit Card Growth of Commercial Banks Sustained at 7% 0% Installment Remaining Most Favorite (Current Issue No.2950)

The credit card business is likely to end the year with satisfactory growth, similar to other types of retail loans. Toward the year-end, competition of the credit card business is characterized by active campaigns and special promotions presented by commercial banks and non-bank operators to boost ... Read more

24 Dec 2018

Financial Institutions

2019 Thai Bank Outlook … Many Challenges for their Profitability (Current Issue No.2948)

The year 2018 has been another year for Thai banks to always be vigilant of various issues. While their fee incomes have contracted due to the reduction of digital funds transfer fees, loan growth has been helpful in offsetting this negative factor. With the support of retail loan growth in the last... Read more

20 Dec 2018

Financial Institutions

The Monetary Policy Committee increases the policy rate for the first time in 7 years; the impact on economic growth is likely to be limited. (Business Brief No.3777)

The Monetary Policy Committee (MPC) agrees to lift the policy rate by 0.25 percentage points from 1.50 to 1.75, the first rate increase in seven years. The lift is aimed at building policy space for the future. KResearch views that the policy rate increase is unlikely to have a significant impact on... Read more

14 Dec 2018

Financial Institutions

MPC meeting on 19/12/18…Greater chance of interest rate hike After clear signal on enlarging policy space (Business Brief No.3775)

KResearch views that there is a greater chance that this year’s last meeting of the Monetary Policy Committee (MPC) will resolve to increase the policy interest rate by 0.25 percent after some signals were clearly sent by the committee on the necessity to rebalance the monetary policy in order to en... Read more

9 Nov 2018

Financial Institutions

New housing loan requirement by BOT will stimulate transactions before its enforcement on April 2019 (Current Issue No.2936)

The Bank of Thailand has announced the criteria to supervise housing loans by adjusting certain details in the Consultation Paper and postponed the effective date to April 1, next year (from the initial schedule of January 2019). The new requirement will not cover purchase and sale contracts or down... Read more

26 Oct 2018

Financial Institutions

Stable Net Loans and Deposits at Thai Commercial Banks in September 2018 (Business Brief No.3769)

In September, net loans in the Thai commercial banking system rose THB3.76 billion or 0.03 percent over the previous month, reaching THB11.345 trillion. The increase, which was supported by growth in all types of retail loans, resulted in the rise in net outstanding loans by 5.78 percent as compared... Read more

10 Oct 2018

Financial Institutions

Regulation on Auto-for-Cash Loans: Creating Standard for Retail Financing (Current Issue No.2932)

Government policy to expand the supervision of the providers of auto-for-cash loans to be approved by the Bank of Thailand and Ministry of Finance is an important step toward more extensive supervisory scope with respect to financial service providers. With a well-defined, transparent business frame... Read more

4 Oct 2018

Financial Institutions

Mortgage loan measures…to curb market imbalance before the uptrend of interest rates (Current Issue No.2929)

The Bank of Thailand has planned to issue macro-prudential measures to control speculation in the property market, where the measures are expected to set the loan-to-value (LTV) for the second home or other specific requirements to ensure debt servicing ability of the borrowers. KResearch ... Read more

26 Sep 2018

Financial Institutions

2018 Loans Likely Exceed Projection Target on Steady Growth Seen in August Net Loans (Business Brief No.3763)

Net loans in the Thai commercial banking system (14 commercial banks) grew THB26.4 billion to THB11.34 trillion in August, rising 0.23 percent MoM or 5.85 percent YoY. The increase was supported by all types of retail loan while SME loans began to recover somewhat. However, because there were still ... Read more

14 Sep 2018

Financial Institutions

MPC Meeting, September 19, 2018: Policy Rate Likely on Hold at 1.50% Pending an Appropriate Rate Hike Ahead (Business Brief No.3759)

We at KResearch are of the view that the Monetary Policy Committee (MPC) will likely keep its policy rate steady at 1.50 percent during the meeting scheduled for September 19, 2018. This is because it may not see the need to raise its policy rate much at this time despite steady improvements in the ... Read more

6 Aug 2018

Financial Institutions

MPC Meeting, August 8, 2018: Policy Rate Likely Kept on Hold at 1.50% to Ensure Steady (Business Brief No.3755)

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 th... Read more

25 Jul 2018

Financial Institutions

Solid Growth Seen in June Net Loans, Driven by Corporate and Retail Loans while Deposits Declined (Business Brief No.3753)

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 l... Read more

26 Jun 2018

Financial Institutions

P2P Lending ... a good opportunity for retail borrowers At the heart of the platform is risk management (Current Issue No. 2917)

Around 4-5 financial technology start-ups have begun providing Peer-to-Peer Lending (P2P Lending) in Thailand by focusing on retail borrowers, especially SME entrepreneurs. The online lending platform should provide these borrowers with an increased access to finance with a cheaper interest rate bec... Read more

25 Jun 2018

Financial Institutions

May Net Loans Grew Steadily MoM while Deposits Fell Slightly (Business Brief No.3749)

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... Read more

10 May 2018

Financial Institutions

The MPC is expected to maintain policy rate at 1.50%; monetary policy direction should be clearer in 2H18

KResearch expects the Bank of Thailand’s Monetary Policy Committee (MPC) to “maintain” their policy rate at 1.50 percent for the third time in 2018 during its meeting on May 16, 2018 to support the continued momentum of Thai economic growth. Domestic spending has not fully recovered amid limited su... Read more

27 Apr 2018

Financial Institutions

Fed Policy Rate Expected to Remain at 1.50-.175 in May Meeting…Continued Rise in US Bond Yield to be Monitored (Business Brief No.3739)

KResearch expects the Federal Reserve (Fed) will resolve to maintain its policy interest rate at 1.50-1.75 percent in its third meeting of this year, in awaiting to assess further developments of the US economy and risks arising from trade disputes. Given the US attempts to minimize their trade defi... Read more

26 Apr 2018

Financial Institutions

Net loans in March 18 improves, contributing to overall outlook in 1Q18 as expected (Business Brief No.3738)

Net loans in March 2018 grew at a slower pace MoM, up by THB19 billion from February or 0.17 percent to THB11.07 trillion. Nonetheless, the overall lending in 1Q18 continued to expand well YoY, even though the beginning of the quarter was the period when borrowers had to repay their deb... Read more

26 Mar 2018

Financial Institutions

February Net Loan Growth boosted by Business Loans High Liquidity Overall (Business Brief No.3735)

Net loans in February 2018 rose THB67 billion over January to USD11.05 trillion, thus rising 0.61 percent MoM and 4.36 percent YoY. Most increases were seen in large business loans, including working capital and term loans, while retail loan growth was mainly driven by auto financing on new and used... Read more

23 Mar 2018

Financial Institutions

MPC Meeting, March 28: Policy Rate Likely Unchanged at 1.50% to Support Economic Growth (Business Brief No.3734)

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... Read more