The Thai economy in 2010 grew at a better-than-expected rate of 7.52% despite several risk factors, including internal political unrest and imbalanced global economy. Henceforth, Thai commercial banks experienced better operating performance in line of deposits, loans, asset quality, and net profits.

In 2010, total assets held by financial institutions in Thailand stood at THB 15.21 trillion, an increase of 14.47% year-on-year. Commercial banks represented 77.25% of the banking industry, with Bangkok Bank remaining the key dominant player in term of total assets. Meanwhile, banking loans grew by 12.09% year on year to THB 8.78 trillion at the end of 2010. This increase was brought by demand recovery, both domestically and globally, prompting loan-to-deposit ratio to rise to 88.27% in 2010, from 85.83% in 2009. Furthermore, banks generally have had ample buffer capital for expected losses as capital ratios remained strong in 2010, signifying a stronger financial position for banks in Thailand.

Going forward, credit card lending will continue to register strong growth as a result of aggressive card promotional campaigns. Also, further consolidation is expected amongst the domestic financial institutions under the government’s Financial Sector Master Plan Phase II (FSMP II) (2010–2014) in an effort to enhance efficiency and competitiveness of the financial institutions system.

All major Thai banks reported improved net profits in 2010, mainly due to the combined effects of strong growth in net interest and dividend income, as well as sharp growth in non-interest income, and lower provisions as asset quality improved. Commercial banking business in 2011 is expected to continue to fare well, driven by Thailand’s strong economic fundamentals.