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Thailand: Banks see growth in fees, service income
Signs of recovery in the Thai economy and stock market in the first quarter raised equity and mutual fund investment, as well as fee-based income for Thailand’s banking sector.
Ten SET-listed commercial banks reported combined fees and service income of 43.4 billion baht in the first quarter this year, up 3.41% quarter-on-quarter and 9.33% year-on-year from the same quarter last year.
Bangkok Bank, the country’s largest lender by total assets, reported double-digit growth in fees and service income on both a quarter-on-quarter and year-on-year basis, at 15.4% and 15.2%, respectively.
Kasikornbank booked 13.6% quarterly growth and 6.56% year-on-year growth from the same quarter last year.
Siam Commercial Bank (SCB) recorded a 8.16% decrease in fees and service income from the previous quarter, but it posted strong growth of 17.1% year-on-year.
Thanyalak Vacharachaisurapol, deputy managing director at Kasikorn Research Center (K-Research), said the higher fees and service income for commercial banks in the first quarter stemmed largely from brokerage, mutual fund and insurance business.
“Given the global economic recovery and improving signs in the Thai economy in the first quarter, it was considered a good time for investment,” she said.
“However, the third wave of Covid-19 infections is likely to dampen investment sentiment in the local equity market. Close monitoring of domestic market sentiment for the remaining three quarters is needed to see whether or how much the fees from investment banking will be affected.”
K-Research forecast a marginal growth rate for the industry’s overall fee income this year compared with last year based on several uncertainties.
Fees from the loan business, in particular, are expected to become bearish as loan expansion is projected at 4% this year.
Metinee Jongsaliswang, SCB’s first executive vice-president and head of SCB Private Banking, said uncertainty in equity markets, both local and international, would create an investment opportunity, depending on prudent asset allocation.
The bank recommends high net worth customers diversify their portfolio investment in both the local bourse and offshore equity markets.
“We recommend customers to be overweight in the US, EU and UK markets given their inoculation progress and the economic recovery signs of the developed economies,” she said.
Source: https://www.bangkokpost.com/business/2109487/banks-see-growth-in-fees-service-income