In Focus
RETAIL BANKING | Staff Reporter, Thailand

Third quarter a mixed bag for Thai banks

Earnings will plunge YoY and rebound QoQ at the same time.

The third quarter will bring good and bad news to Thai banks with earnings expected to rebound 5% QoQ but plunge 43% YoY, according to a UOB Kay Hian report.

The sharp YoY decline will be brought about by lower net interest income due to narrower NIM, higher provisions, and lower non-interest income. On the other hand, lower provisions from large banks and higher fee income from most lenders will bolster the QoQ uptick.

Looking forward, analyst Tanadech Rungsrithananon sees a 34.5% YoY earnings plunge for 2020 with a possible 5% YoY rebound in 2021.

Loan quality remains a focus for the sector as many are under relief programmes which will lapse in October. Sector NPL will moderately rise in Q3 due to the forbearance period and loan restructuring, with NPL ratio inching up 4.2%.

Most of the UOBKH-covered banks will release more details of the loans under the programmes after their Q3 results, the report concluded.

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