Recovering business activity props up Thai banks’ revenues 

Credit costs will remain elevated in the long-term, however.

Increased business activity and stable, even slightly improving net interest margin will support Thai banks’ revenue, according to Fitch Ratings.

Although credit costs will remain elevated in the near term, Fitch noted that they have likely peaked, which meant that it should be less of a drag on operating profitability.

ALSO READ: Thailand plays catch up with global green finance goals

On the downside, economic recovery is expected to be slow, limiting the prospects for a substantial asset-quality improvement.

On the upside, the six biggest banks’ hold the majority of the market share, with a combined deposit market share of around 84%.

ALSO READ: Tourism woes hurt Thailand banks’ loans

Banks are also expected to be propped up either from extraordinary support from the government or their major shareholders.