Fitch Ratings expects the standalone profiles of Thailand's large banks to benefit from the gradual recovery from the weak economic environment of 2020-2021. Increased business activity and stable, or slightly improving, net interest margins would support bank revenue.
The banks have been aggressive in provisioning over the past several years. Fitch believes credit costs have peaked and, although they will remain elevated in the near term, they should be less of a drag on operating profitability. However, the slowness of the recovery limits the prospects for a substantial asset-quality improvement.
Thailand's six domestic systemically important banks comprise the bulk of the banking system, with a combined deposit market share of around 84%. Aside from standalone factors, the banks' ratings are also underpinned by extraordinary support from the government or their major shareholders.
The report "Thailand Large Banks - Peer Review 2022" is available at www.fitchratings.com or by clicking the link in this media release.
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