The operating environment remains challenging for the Thai banking sector, and Fitch expects asset quality to deteriorate further in 2016. However, bank ratings generally remain supported by the sufficient loan-loss reserve buffers and solid capitalisation.
Fitch believes that the SME loans and unsecured personal consumer lending segments are particularly at risk. Both of these segments have seen more rapid credit growth recently, and are vulnerable to weaknesses in the overall economy.
Several regulatory initiatives will come into effect in 2016, including the full implementation of a deposit insurance regime and additional Basel III requirements on liquidity and capital. However, these are not expected to materially impact the sector.
The report "2016 Outlook: Thai Banks " is available at www.fitchratings.com or by clicking on the link in this media release.