Thai bank profits surges ahead of Basel III

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Overall net profit of Thailand’s 10 largest commercial banks is expected to record a 31-per cent growth to nearly $5.7 billion in 2012, Bangkok-based financial services company Asia Plus Securities said in a research note on January 7.

In the fourth quarter of 2012 alone, the profits of the 10 banks was expected to grow by 90 per cent to $1.34 billion year-on-year, the note said.

For 2013, the outlook for lending remains positive, as the brokerage house expects expansion by 13.6 per cent from 2012. Business loans are in the spotlight thanks to the infrastructure investment by the government and lending demand due to urbanisation, driven by the upcoming Asean Economic Community.

Meanwhile, at the end of 2012 the Bank of Thailand has issued directives to immediately apply the Basel III rules on the capital ratio of local and foreign banks operating in the country.

Since January 1, 2013, local and foreign banks in Thailand must maintain the capital adequacy ratio at at least 8.5 per cent of risk assets, which is unchanged from the current requirement. For Thai banks, tier-1 capital must be at least 6 per cent, including minimum 4.5 per cent of common equity.

Aside from tougher requirements on risk management which will affect the capital adequacy ratio, the Basel Committee on Banking Supervision, which issued the Basel III regulative, also drew up tougher requirements on the leverage ratio. This will affect banks’ activities as well as liquidity-related risk management.

The Bank of Thailand said that it is studying the regulation and analysing the repercussions before applying the regulation with financial institutions in Thailand, according to Bangkok-besed newspaper The Nation.

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Reading Time: 1 minute

Overall net profit of Thailand’s 10 largest commercial banks is expected to record a 31-per cent growth to nearly $5.7 billion in 2012, Bangkok-based financial services company Asia Plus Securities said in a research note on January 7.

Reading Time: 1 minute

Overall net profit of Thailand’s 10 largest commercial banks is expected to record a 31-per cent growth to nearly $5.7 billion in 2012, Bangkok-based financial services company Asia Plus Securities said in a research note on January 7.

In the fourth quarter of 2012 alone, the profits of the 10 banks was expected to grow by 90 per cent to $1.34 billion year-on-year, the note said.

For 2013, the outlook for lending remains positive, as the brokerage house expects expansion by 13.6 per cent from 2012. Business loans are in the spotlight thanks to the infrastructure investment by the government and lending demand due to urbanisation, driven by the upcoming Asean Economic Community.

Meanwhile, at the end of 2012 the Bank of Thailand has issued directives to immediately apply the Basel III rules on the capital ratio of local and foreign banks operating in the country.

Since January 1, 2013, local and foreign banks in Thailand must maintain the capital adequacy ratio at at least 8.5 per cent of risk assets, which is unchanged from the current requirement. For Thai banks, tier-1 capital must be at least 6 per cent, including minimum 4.5 per cent of common equity.

Aside from tougher requirements on risk management which will affect the capital adequacy ratio, the Basel Committee on Banking Supervision, which issued the Basel III regulative, also drew up tougher requirements on the leverage ratio. This will affect banks’ activities as well as liquidity-related risk management.

The Bank of Thailand said that it is studying the regulation and analysing the repercussions before applying the regulation with financial institutions in Thailand, according to Bangkok-besed newspaper The Nation.

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