Thai Securities Firms Face Structural Challenges Amidst External Headwinds

Tuesday 14 June 2022 08:50
Thailand's securities industry will continue to face secular challenges pressuring profitability from continued compression of brokerage commission rates, fierce competition, as well as investments relating to digitalisation, says Fitch Ratings. Furthermore, renewed economic headwinds from a global growth slowdown will also lead to a less favourable liquidity environment.

Fitch expects profitability to weaken from the exceptional strength in 2021 as trading volume is unlikely to be sustained. The sector's net profit dropped by 22.7% yoy in Q122 with annualised return on equity down to 13.3% from 14.4% in 2021. Nonetheless, we expect Fitch-rated entities to be capable of maintaining their balance-sheet strengths and credit profiles. Our rating outlook on the sector remains stable.

The dashboard, "Thai Securities Dashboard: June 2022", is available at www.fitchratings.com or by clicking
on the link above.

Source: Fitch Ratings