Banking

Although stable, liquid and profitable, Thailand’s banking sector saw growth moderate in 2016 as rising defaults in the highly leveraged consumer and small business segments weighed on lending growth. Large corporate lenders have increasingly turned to alternative financing channels, most notably the short-term bond market, further impacting loan growth in 2016. Non-performing loans are expected to peak in 2017, while rising bond yields and regulatory changes to bill of exchange issuance should see larger corporates return to conventional bank financing. Although efforts to digitise the Thai economy will impact fee-based income in the near term, the long-term benefits to the sector and the wider Thai economy should easily offset any losses. As such, the sector’s mid-term outlook remains positive, bolstered by new expansion opportunities in the ASEAN market. This chapter contains interviews with Veerathai Santiprabhob, Governor, Bank of Thailand; Chartsiri Sophonpanich, President, Bangkok Bank; and Darren Buckley, Country Head, Citibank.