According to the Bank of Thailand, in the first quarter of 2022 the Thai banking system remained resilient with high levels of capital fund, loan loss provision and liquidity, and are well prepared to accommodate loan demand and facilitate a sustained economic recovery.

Overall asset quality remained stable from the previous quarter owing primarily to debt restructuring and financial assistance measures. Meanwhile, the banking system’s profitability improved from the same period last year mainly from loan expansion which led to higher interest income. Details are as follows:

The Thai banking system’s capital fund stood at 3,016.4 billion baht, equivalent to capital adequacy ratio (BIS ratio) of 19.8%. Loan loss provision remained high at 909.4 billion baht with NPL coverage ratio of 165.6%. Liquidity coverage ratio (LCR) registered at 192.5%.

In the first quarter of 2022, banks’ overall loan growth was 6.9% year-on-year, increasing from 6.5% in the previous quarter.

Details on bank loans are as follows: 

Corporate loan growth was 8.8% year-on-year, edging up from 7.9% in the previous quarter. Large corporate loans1 expanded in almost all business sectors, reflecting financing needs of businesses in line with improving economic recovery. Meanwhile, SME loans2  grew mainly from rehabilitation credit scheme.

Consumer loans grew by 3.3% year-on-year

Consumer loans grew by 3.3% year-on-year, a slower pace from the previous quarter as the Omicron outbreak affected consumer confidence. Mortgage loan growth slowed down in line with the decline in housing demand.

Auto loan remained stable while growth in domestic car sales becomes more evident. Meanwhile, credit card loan expanded in tandem with an increase in credit card usage. Personal loans continued to grow due to households’ liquidity needs.

Banks’ overall loan quality in the first quarter of 2022 remained stable

Banks’ overall loan quality in the first quarter of 2022 remained stable from the previous quarter owing primarily to debt restructuring and financial assistance measures.

The gross non-performing loans (NPL or stage 3) increased marginally to 531.9 billion baht, equivalent to the NPL ratio of 2.93%. Meanwhile, the ratio of loans with significant increase in credit risk (SICR or stage 2) to total loans stood at 6.09%, decreasing from 6.39% in the previous quarter.

The banking system recorded a net profit of 49.4 billion baht in the first quarter of 2022, increasing by 11.8% from the same quarter last year.

This was due primarily to loan expansion which led to higher interest income, while non-interest income decreased mainly from fee income.

Compared to the previous quarter, net profit improved due to bank’s operating cost control and lower provisioning expenses. As a result, the return on asset ratio (ROA) increased to 0.87% from 0.67% in the previous quarter. Meanwhile, the ratio of net interest income to average interest-earning assets (Net Interest Margin: NIM) remained stable at 2.45%.

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1) Corporates with a credit line more than 500 million baht with a bank as of March 2022.
2)  Corporates with a credit line not exceeding 500 million baht with a bank as of March 2022.

Bank of Thailand
May 17, 2022

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