Bangkok--28 Aug--Fitch Ratings
Thai commercial banks have sufficient buffers to cope with a downturn, but they could be challenged if there is an economic slowdown that is more severe or protracted than expected, says Fitch Ratings in its APAC Banks - Chart of the Month report.
Loan growth has slowed down over the past year, while capital levels are acceptable and non-performing loans (NPLs) appear to have stabilised. However, overall levels of private-sector and household leverage have remained high (at 154% and 83% of GDP respectively), which could quickly lead to credit quality concerns in an economic recession.
Fitch expects loan growth to pick up in 2H14 as the business environment becomes more stable and pent-up investment is released. An increase in loan growth is also likely to contribute to greater deposit competition among banks, particularly as underlying trends in funding already show tighter liquidity conditions.
The report is available by clicking on the link above or at www.fitchratings.com