Banking Stocks Soar as BOT’s Measures Aim to Relieve Burden from Thai Banks

The banking sector outperformed other stocks in the Thai market with KBANK as the highest gainer of 7% in the morning session in response to the new measures from the Bank of Thailand to support financial institutions and debtors.

 

Kasikornbank Public Company Limited (KBANK) rose 7.37% to ฿116.50/share.

Bangkok Bank Public Company Limited (BBL) increased 6.73% to ฿111.00/share.

The Siam Commercial Bank Public Company Limited (SCB) gained 5.32% to ฿104.00/share.

TMBThanachart Bank Public Company Limited (TTB) hiked 5.05% to ฿1.04/share.

 

On August 20, 2021, the Bank of Thailand issued further support measures to assist debtors and financial institutions during the Covid-19 situation in Thailand.

Among the measures announced by the Central Bank, debt restructuring and a reduction in the Financial Institutions Development Fund (FIDF) made a direct impact on Thai banking stocks.

BOT would allow Thai banks to restructure from short-term loan to long-term, including other methods, which would benefit the banks’ NPL ratio to increase at a slower pace.

Meanwhile, regulators also agreed to reduce the Financial Institutions Development Fund (FIDF) to 0.23% from 0.46% until the end of 2022.

BOT stated that it will also be flexible on debt classification and reserve requirements for banks given the economic hardship for SMEs and retailers.