Thai banks show healthy profits, fintech firms invest

Thailand’s ten largest banks all boasted healthy balance sheets during the first quarter of 2017, with profits averaging 8 percent higher than the same period last year, while an industry publication noted that global fintech companies are increasingly viewing Thailand as the fintech hub of Southeast Asia, as British fintech startup Scale360 set up a development center in Bangkok last week.

Among the top ten banks, Siam Commercial Bank (SCB) and Krung Thai Bank (KTB) reported the biggest jumps in the value of their profits, although Krung Thai also saw a sharp rise in non-performing loans. All the other banks reported no increase in their levels of non-performing loans, with most having less than 3 percent of their loans classified as such.

The smaller Kiatnakin Bank and Tisco Financial Group registered the largest percentage increases in profits at 37.7 percent and 18.8 percent, respectively, although the value of those increases were much more modest in comparison. Only CIMB Thai Bank saw a drop in the percentage of its profits compared to the same period last year, even though the bank was still profitable.

A healthy and profitable banking and financial sector is a key pillar for any economy, including Thailand’s. The Asian economic meltdown of 1997 began as a currency crisis and quickly engulfed banks and the financial sector. Since then, Thailand’s central bank has reformed the way it works and has improved its regulation and monitoring of the Kingdom’s banking and financial sector, while the banks themselves have also instituted many changes and improvements.

SCB enjoyed a 13 percent increase in profits year on year, reeling in $345 million, while Kasikorn Bank took in $295 million for a 5.45 percent increase. Krung Thai recorded $247 million in profits, while Bangkok Bank registered $240 million in profits.

At the same time, global fintech (financial technology) firms and startups are increasingly eyeing Thailand as a hub for their services, and research and development, in the Southeast Asian region, the Finews Asia website reported last week.

The website said that Scale360, a British startup that “develops software to power banks’ digital transformation, has set up a Bangkok Development Center to service banks’ growing need for financial technology and to cultivate local skills in leading global technologies.”

Among the actions taken by Thai regulators to promote an environment attractive to fintech firms, the website noted, was the establishment this year of a “sandbox” by the central bank, where fintech startups can test products and services in a live environment to fine tune them and iron out any bugs.

The Board of Investment has also been offering a range of generous incentives such as tax holidays for fintech startup firms.