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Fitch: Large Thai Banks Have Less Room for Domestic Growth
August 28, 2014 / 1:56 AM / 3 years ago

Fitch: Large Thai Banks Have Less Room for Domestic Growth

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Thailand’s Large Banks: Peer Review here BANGKOK/SINGAPORE, August 27 (Fitch) Thailand's largest commercial banks have improved their buffers in terms of capital and reserve coverage over the past five years, which will help them cope with a normal economic downturn, says Fitch Ratings. However, domestic growth prospects for Thailand's largest banks are becoming more limited, with these banks already having high market share in many financial segments. Thailand's four largest commercial banks - Bangkok Bank (BBL), Siam Commercial Bank (SCB), Kasikornbank (KBANK) and Krung Thai Bank (KTB) - have successfully expanded their universal banking franchises over the past five years, in fund management, securities brokerage, investment banking, and life assurance. These have added to their consistently high market share in lending and deposits - the four banks combine for around 59% market share of commercial bank assets. The focus for the large banks will need to be on protecting their market share, as well as on cost management and efficiency gains. There is also some room for international expansion, although Fitch expects this to be gradual. The banks' initial strategy will be to primarily respond to the increased regional activities and investments of Thai corporates. Competition from regional players in the Thai banking sector has also intensified, particularly after the acquisition in late 2013 of the Bank of Ayudhya (the fifth largest Thai commercial bank) by the Bank of Tokyo-Mitsubishi UFJ. While Thailand's large banks are generally well-positioned against an economic downturn, downside risks to their financial buffers, and potential pressures to the ratings, may emerge if the downturn is more severe and protracted than expected. The accompanying special report "Thailand's Large Banks: Peer Review - Domestic Expansion Becoming Limited" is available at or by clicking the link above. Contact: Parson Singha Senior Director +662 108 0151 Fitch Ratings (Thailand) Limited Park Ventures, Level 17 57 Wireless Road, Lumpini Patumwan, Bangkok 10330 Patchara Sarayudh Director +662 108 0152 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: Additional information is available on Related Research: Bangkok Bank Public Company Limited (June 2014) Kasikornbank Public Company Limited (June 2014) Krung Thai Bank Public Company Limited (July 2014) Siam Commercial Bank Public Company Limited (July 2014) Applicable Criteria and Related Research: Bangkok Bank Public Company Limited - Ratings Navigator here Kasikornbank Public Company Limited here Krung Thai Bank Public Company Limited here Siam Commercial Bank Public Company Limited here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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