Gradual Recovery to Continue for Thai Banking Sector

Wednesday 11 May 2022 14:48
The operating environment for Thai banks remains supportive of a gradual recovery in financial performance, says Fitch Ratings. However, business activity, which remains below pre-pandemic levels, is constrained by continued macroeconomic risks, limiting the potential for significant upside in the near term.

Fitch expects loans under regulatory relief to fall significantly over the course of the year. Around 14% of system loans were under relief as of February 2022, although the portion would be lower if state policy banks were excluded.

Preliminary 1Q22 results from listed banks have been broadly in line with our expectations, with a slight recovery in profitability, as well as stable or improving asset quality ratios. Fitch expects bank earnings to continue to recover during 2022, supported by lower credit costs.

The report, "Thai Banks Dashboard: May 2022", is available at www.fitchratings.com or by clicking on the link above.

Source: Fitch Ratings