KResearch: Banks to enjoy rising profit in Q1/2011

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BANGKOK, 20 April 2011 – Kasikorn Research Center (KResearch) has expected that commercial banks will be enjoying a higher net profit of about 15% in the first quarter this year thanks to the rising loans and interest rates.

KResearch forecast that net interest revenue of commercial banks on both quarter-on-quarter and year-on-year bases will be growing thanks to a wider margin between loan and saving interst rates as well as the growing credit amount.

KResearch hence projected that net profit of all Thai commercial banks, including net interest income and service fees would expand by 11.6-15.7% year-on-year worth 107-111 billion baht in the first quarter this year.

As for the rest of the year, commercial banks will be facing with complicated tasks in boosting their profits amid looming risk factors as a consequence of the recent earthquake in Japan on related businesses and investment plans in Thailand.

As for the southern flood in Thailand, KResearch believed that the impact would be limited to some branches of commercial banks operating in the region and affect clients’ ability to repay their debts. Unpaid loans in the South account for only 5% of the existing loans of the country.