Thai banks' earnings to be largely driven by interest income in 2017

Bangkok Bank and Krung Thai Bank are potentially the biggest gainers.

According to Maybank Kim Eng, in light of stronger balance sheets and stabilising NPLs, banks are expected to push for more loans this year.

"We see the big banks as potential gainers from the liquidity crunch felt by BE issuers, especially BBL and KTB, which experienced sluggish loan growth in 2016 as some of their clients tapped the debt market instead."

The analyst adds that interest income (NII) thus will become an even bigger earnings driver this year.

"For example, an additional 1ptt rise in 2017F loan growth from our base case of 6% and 5% for BBL and KTB could each add another 1% to our forecasts."