Post by account_disabled on Dec 30, 2023 4:34:20 GMT
The mid-point score for Thai banks' operating environment has been adjusted to ' bbb' from 'bbb+' due to the impact of the coronavirus outbreak. Let there be huge pressure on the banking sector. Although the severity and duration of the outbreak remain unclear. But Fitch believes the impact will be negative on economic growth and overall business conditions. This is in line with the Bank of Thailand's (BoT) estimate that the Thai economy may contract by 5.3% in 2020. The reduction in environmental factors has taken into account the contraction of the economy. The outbreak of the coronavirus comes at a time when the Thai banking sector is experiencing a very challenging business cycle. The performance of the banking sector has continued to weaken over the past several years.
Due to the relatively sluggish economic situation Continued low interest rate levels Buy Bulk SMS Service and intense competition This results in decreased revenue growth. The issue of the coronavirus pandemic is a factor that has put even more pressure on this trend in the banking sector. By announcing the closure of various locations In the past, this will further affect the economic situation that has already slowed down since the end of 2019 due to trade tensions between China and the United States. Delays in the annual budget and drought will cause the banking sector's asset quality and performance to deteriorate significantly compared to Fitch's expectations. Asset quality ratios have continued to deteriorate over the past several years. And currently the banking sector is facing a trend of increasing non-performing loans due to the virus outbreak.
The debt serviceability of debtors with weak financial status is highly vulnerable to a prolonged economic slowdown. For in Thailand This group will include SME borrowers, which account for approximately one-third of the banking sector's total loans. The level of non-performing loans among SMEs had continued to increase even before the coronavirus outbreak. In addition, retail debtors are likely to be affected as well. Especially among debtors who do not use home loans. (which accounts for approximately 16% of total loans) if the unemployment rate increases The BoT has issued various measures. To cope with such a crisis The policy interest rate was reduced to a record low rate. Regulations have been relaxed to help support banks in restructuring the debt of all groups of debtors.
Due to the relatively sluggish economic situation Continued low interest rate levels Buy Bulk SMS Service and intense competition This results in decreased revenue growth. The issue of the coronavirus pandemic is a factor that has put even more pressure on this trend in the banking sector. By announcing the closure of various locations In the past, this will further affect the economic situation that has already slowed down since the end of 2019 due to trade tensions between China and the United States. Delays in the annual budget and drought will cause the banking sector's asset quality and performance to deteriorate significantly compared to Fitch's expectations. Asset quality ratios have continued to deteriorate over the past several years. And currently the banking sector is facing a trend of increasing non-performing loans due to the virus outbreak.
The debt serviceability of debtors with weak financial status is highly vulnerable to a prolonged economic slowdown. For in Thailand This group will include SME borrowers, which account for approximately one-third of the banking sector's total loans. The level of non-performing loans among SMEs had continued to increase even before the coronavirus outbreak. In addition, retail debtors are likely to be affected as well. Especially among debtors who do not use home loans. (which accounts for approximately 16% of total loans) if the unemployment rate increases The BoT has issued various measures. To cope with such a crisis The policy interest rate was reduced to a record low rate. Regulations have been relaxed to help support banks in restructuring the debt of all groups of debtors.