Ms. Suwannee Jatsadasak, Senior Director of the Bank of Thailand, on 17 May 2021 reported on the Thai banking system’s performance in the first quarter of 2021 that the Thai banking system remained resilient, with high levels of capital fund, loan loss provision, and liquidity.

During the period, she said, the Thai banking system was able to accommodate loan demand and weather increasing economic uncertainties arising from the new wave of COVID-19 infection.

Credit assistance measures, coupled with revisions to rules on loan classification and provisioning, helped alleviate the deterioration of bank loan quality. Meanwhile, the banking system’s profitability declined from the same period last year, as a result of lower interest income from loans.

In the first quarter of 2021, banks’ overall loan growth was 3.8 percent year-on-year, decreasing from 5.1percent in the previous quarter.

The banking system recorded net profit of 43.8 billion baht in the first quarter of 2021, decreasing from the same quarter last year by 12 percent. This was mainly attributed to a decline in interest income from loans.

However, net profit rose from the previous quarter because of a decline in operating cost and provisioning expenses as banks had already set aside an elevated level of provision in 2020. Consequently, the ratio of return on asset (ROA) went up to 0.80 percent from 0.32 percent in the previous quarter. The ratio of net interest income to average interest-earning assets (Net Interest Margin: NIM) decreased from 2.52 percent to 2.43 percent.

 

Source: The Government Public Relations Department