Here's why Thai banks are solid enough to weather shocks

They have a pretty high capital base.

According to Maybank Kim Eng, while Thai banks may look a bit expensive compared with regional peers, they come with high quality.

Here's more from Maybank Kim Eng:

Thai banks possess solid balance sheets. Even though people worry about the rising NPL in the past couple of years, the NPL has just risen about 80bps from the trough in 2014 to less than 3% currently.

Furthermore, banks aggressively stepped up their provisioning expenses, maintaining the coverage ratio at a high level (about 130%).

Thai banks have a pretty high capital base. The capital adequacy ratio for the whole system is about 18% (in which 14% is CET1), higher than the 9.125% required by the Bank of Thailand.

Lackluster top lines this year should improve next year as NPL fears subside and banks will focus on making loans again. While we believe the overall growth outlook may remain benign, consumer loan growth should continue to outperform the sluggish corporate segment.