Thai banks stable despite poorer performance
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Stability in the Thai banking system was maintained last year, despite a decrease in lending and operating profits as well as slight deterioration in the quality of consumer loans, said the Bank of Thailand.
Yet, high provisions and capital fund should help them cushion economic volatility, the central bank said in a report released today.
Loan growth dropped sharply to 5 per cent in 2014, compared to 11 per cent in 2013. Consumer loans, accounting for 31.1 per cent of total, expanded only 7.4 per cent on year thanks to contraction in auto loans, personal loans and credit card loans.
Thai banks' non-performing loans rose Bt11.5 billion on year to Bt277.2 billion, or 2.15 per cent of outstanding loans.
The NPLs for consumer loans however rose to 2.4 per cent, due mainly to the deterioration in the quality of some auto loans, personal loans and credit card loans.
Provisions at the end of the year stood at 169.4 per cent of non-performing loans.
Thai banks' capital fund under BIS standard rose to 16.8 per cent of risk assets, compared to 15.7 per cent in 2013. Of this, tier-1 capital also rose from 12.6 per cent to 13.7 per cent.
In the year, Thai banks' combined operating profit rose by only Bt7.7 billion or year, or 2.3 per cent, due to slower growth in interest and non-interest income against higher operating cost. Earnings also rose only 5 per cent, against 17.3 per cent in the previous year.
