Connect with us

Banking

Thai banks net profit stood at 146.2 billion baht in 2020

The Thai banking system remained resilient with high levels of capital fund, loan loss provision and liquidity to support economic recovery from the COVID-19 pandemic. according to latest Bot assessment.

Published

on

bangkokbank

Ms. Suwannee Jatsadasak, Senior Director, Bank of Thailand, reported on the Thai banking system’s performance in 2020 that the Thai banking system remained resilient with high levels of capital fund, loan loss provision and liquidity to support economic recovery from the COVID-19 pandemic. 

Credit assistance measures, coupled with revisions to rules on loan classification and provisioning supported bank loan expansion and alleviated the deterioration of bank loan quality.  Meanwhile, banking system’s profitability declined as banks continued to set aside loan loss provision at a high level as a cushion against a potential adverse impact of COVID-19 on loan quality. 

Details are as follows:

 Capital Fund of the Thai banking system was at 2,994.3 billion baht, equivalent to capital adequacy ratio (BIS ratio) of 20.1%.  Loan loss provision remained high at 799.1 billion baht with NPL coverage ratio of 149.2%.  Liquidity coverage ratio (LCR) registered at 179.6%.

Banks’ overall loan growth was 5.1% year-on-year in 2020 edging up from 2.0% in 2019

 In 2020, banks’ overall loan growth was 5.1% year-on-year, edging up from 2.0% in 2019. Details on bank loan are as follows: 

Corporate loan (64.2% of total loan) expanded at 5.4% year-on-year, following a contraction of 0.8% in the previous year. This was mainly driven by an expansion in large corporate loan, where some large corporates switched their funding source from bond issuance to bank loan in the second quarter of 2020. Meanwhile, SME loan contracted at a lower rate, assisted by the soft loan scheme. 

Consumer loan grew at a slower pace at 4.6%

 Consumer loan (35.8% of total loan) grew at a slower pace at 4.6% year-on-year, compared to an expansion of 7.5% in the previous year, which was consistent with weak household purchasing power due to COVID-19. 

However, consumer loan growth improved across all portfolios in the second half of 2020 following an improvement in economic activity after the relaxation of lockdown measures.  In particular, mortgage lending expanded in line with an increase in demand for low-rise residential properties and developers’ marketing campaigns.   

On the loan quality front, debtors affected by COVID-19 continued to receive credit assistance from banks.  As a result, the gross non-performing loan (NPL or stage 3) outstanding slightly increased to 523.3 billion baht, equivalent to NPL ratio of 3.12%.  Meanwhile, the ratio of loans with significant increase in credit risk (SICR or stage 2) to total loans stood at 6.62%.   

Thai banks net profit stood at 146.2 billion baht in 2020

 The banking system recorded net profit of 146.2 billion baht in 2020, a decline from the previous year.  This was attributed to a high level of provisioning expenses to cushion against a potential impact of COVID-19 on loan quality going forward, combined with a high base effect from the recognition of extraordinary items from gains on sales of investments in 2019. 

As a result, the ratio of return on asset (ROA) declined from 1.39% in the previous year to 0.65%.  The ratio of net interest income to average interest-earning assets (Net Interest Margin: NIM) decreased from 2.73% to 2.51%.  

>>​Download Press​​ PDF

Click to comment

Leave a Reply

Banking

The Thai banking system remained resilient in Q3 2021 says BoT

The Thai banking system remained resilient with high levels of capital fund, loan loss provision and liquidity to serve an important role in assisting borrowers and accommodating loan demand to support economic recovery amidst uncertain COVID-19 situation, said Bank of Thailand latest press release.

Published

on

64cb74e9 atm bank

The Thai banking system remained resilient with high levels of capital fund, loan loss provision and liquidity to serve an important role in assisting borrowers and accommodating loan demand to support economic recovery amidst uncertain COVID-19 situation, said Bank of Thailand latest press release.

(more…)
Continue Reading

Economics

Stable outlook for APAC sovereigns as growth rebounds and debt stabilizes

Economic growth rates in Asia-Pacific are broadly rebounding and debt burdens stabilizing, giving rise to a stable outlook for sovereign creditworthiness in 2022. Still, the pace of recovery differs vastly, and some economies will experience deep economic scarring, according to a new report by Moody’s Investors Service.

Published

on

moodys flare

Economic growth rates in Asia-Pacific are broadly rebounding and debt burdens stabilizing, giving rise to a stable outlook for sovereign creditworthiness in 2022. Still, the pace of recovery differs vastly, and some economies will experience deep economic scarring, according to a new report by Moody’s Investors Service.

(more…)
Continue Reading

Recent

Most Read

Join 14,209 other subscribers