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Business Times
8 hours ago
- Business
- Business Times
Thailand's tourism slump and household debt weigh on its lenders
[BANGKOK] Thailand's banks are grappling with weak lending amid high household debt, slowing tourism and sluggish consumer spending that risk dampening their outlook for the rest of the year. The banks are facing lacklustre earnings tied to lower net interest margins – the difference between interest income and paid interest – and muted loan growth as the country endures economic uncertainties, according to a note from Citi Research. Thailand's export and tourism reliant economy has expanded at an average of under 2 per cent over the past decade, trailing other major South-east Asian economies. Gross domestic product will likely grow 1.3 per cent to 2.3 per cent in 2025, constrained by high household debt and slowing tourist arrivals, while the economy is also at risk of a 36 per cent tariff from the US, its largest export market. Thai banks are expected 'to perform worse than their peers elsewhere in major South-east Asian markets through year-end,' said Bloomberg Intelligence analyst Sarah Jane Mahmud. Weak domestic lending is compounded by a slowdown in global trade and 'high levels of bad debt to be exacerbated as small businesses struggle with fewer than expected tourist arrivals and competition from an influx of cheap goods from China in the new trade war,' she said. TMBThanachart Bank expects the Thai economy to continue slowing in the third quarter on lower consumption and overall investments, it said in its earnings statement on Jul 18. It posted 5 billion baht (S$198.4 million) in second-quarter net income, a 7.2 per cent year-on-year drop. Kasikornbank posted a 3.2 per cent fall year on year in its second-quarter net profit due to a decline in net interest income in line with market conditions, it said. The lender said it remains focused on expansion of quality loans. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up SCB X expects full-year loan growth to fall below the lower end of its 1 to 3 per cent target, though it reported a 27.7 per cent on-year jump in second-quarter net profit supported by higher investment gains. Bangkok Bank posted a 0.3 per cent on-year rise in its second quarter net profit. Subdued inflationary pressure indicates domestic demand 'has not yet fully recovered,' it said in its recent earnings statement. Kasikornbank and SCB X are forecast to see year-on-year declines in net profit for the third quarter from declining net interest margins due to policy rate cuts, according to Krungsri Securities analyst Chayaporn Tocharoen. 'Loans of Thai commercial banks aren't expected to record growth in the third quarter mainly because of a weak export outlook,' Kasikorn Securities analyst Korakot Sawetkruttamat said. Higher non-performing loans are anticipated in the second half because of lower-than-expected registrations for the government's debt relief programme, he said. Meanwhile, exporters may struggle to repay loans if they face high US tariffs, Korakot said. The Thai government in late 2024 put in place debt-relief measures that included a three-year suspension in interest and reduced principal payments. 'Policy measures, however, require time to crystallise and effect a structural shift,' said Deepali Seth Chhabria, a primary credit analyst at S&P Global Ratings. A lower negotiated tariff would give Thai banks some relief, Bloomberg Intelligence analyst Sarah Jane said. A rise in wealth management activity in Thailand could also 'help boost fee income and support revenue as net interest income wanes,' she said. BLOOMBERG
Bangkok Post
11 hours ago
- Business
- Bangkok Post
Thailand's tourism slump and household debt weigh on its lenders
Thailand's banks are grappling with weak lending amid high household debt, slowing tourism and sluggish consumer spending that risk dampening their outlook for the rest of the year. The banks are facing lackluster earnings tied to lower net interest margins — the difference between interest income and paid interest — and muted loan growth as the country endures economic uncertainties, according to a note from Citi Research. Thailand's export and tourism reliant economy has expanded at an average of under 2% over the past decade, trailing other major Southeast Asian economies. Gross domestic product will likely grow 1.3% to 2.3% in 2025, constrained by high household debt and slowing tourist arrivals, while the economy is also at risk of a 36% tariff from the US, its largest export market. Thai banks are expected 'to perform worse than their peers elsewhere in major Southeast Asian markets through year-end,' said Bloomberg Intelligence analyst Sarah Jane Mahmud. Weak domestic lending is compounded by a slowdown in global trade and 'high levels of bad debt to be exacerbated as small businesses struggle with fewer than expected tourist arrivals and competition from an influx of cheap goods from China in the new trade war,' she said. TMBThanachart Bank expects the Thai economy to continue slowing in the third quarter on lower consumption and overall investments, it said in its earnings statement on July 18. It posted 5 billion baht in second-quarter net income, a 7.2% year-on-year drop. Kasikornbank posted a 3.2% fall year-on-year in its second-quarter net profit due to a decline in net interest income in line with market conditions, it said. The lender said it remains focused on expansion of quality loans. SCB X expects full-year loan growth to fall below the lower end of its 1%-3% target, though it reported a 27.7% on-year jump in second-quarter net profit supported by higher investment gains. Bangkok Bank posted a 0.3% on-year rise in its second quarter net profit. Subdued inflationary pressure indicates domestic demand 'has not yet fully recovered,' it said in its recent earnings statement. Kasikornbank and SCB X are forecast to see year-on-year declines in net profit for the third quarter from declining net interest margins due to policy rate cuts, according to Krungsri Securities analyst Chayaporn Tocharoen. 'Loans of Thai commercial banks aren't expected to record growth in the third quarter mainly because of a weak export outlook,' Kasikorn Securities analyst Korakot Sawetkruttamat said. Higher non-performing loans are anticipated in the second half because of lower-than-expected registrations for the government's debt relief program, he said. Meanwhile, exporters may struggle to repay loans if they face high US tariffs, Mr Korakot said. The Thai government in late 2024 put in place debt-relief measures that included a three-year suspension in interest and reduced principal payments. 'Policy measures, however, require time to crystallise and effect a structural shift,' said Deepali Seth Chhabria, a primary credit analyst at S&P Global Ratings. A lower negotiated tariff would give Thai banks some relief, Bloomberg Intelligence analyst Sarah Jane said. A rise in wealth management activity in Thailand could also 'help boost fee income and support revenue as net interest income wanes,' she said.
Bloomberg
13 hours ago
- Business
- Bloomberg
Thailand's Tourism Slump and Household Debt Weigh on Its Lenders
Thailand's banks are grappling with weak lending amid high household debt, slowing tourism and sluggish consumer spending that risk dampening their outlook for the rest of the year. The banks are facing lackluster earnings tied to lower net interest margins — the difference between interest income and paid interest — and muted loan growth as the country endures economic uncertainties, according to a note from Citi Research.
Wall Street Journal
7 days ago
- Business
- Wall Street Journal
Gold Edges Higher on Possible Position Adjustments
2340 GMT — Gold edges higher in the early Asian session on possible position adjustments. However, diminishing Fed rate-cut expectations spurred by U.S. CPI data released overnight could cap gains. Also, the U.S.' passage of the 'One Big Beautiful Bill Act' and coming trade deals help reduce U.S. growth worries and weigh on gold demand, Citi Research's Kenny Hu says in a research report. 'We continue to highlight our view that we may have seen gold price highs at $3,500/oz as the market deficit is peaking soon, if not already,' the analyst adds. Spot gold is 0.2% higher at $3,330.11/oz. (
See - Sada Elbalad
12-07-2025
- Business
- See - Sada Elbalad
Gold Surges 100% in Two and a Half Years: Will the Upward Momentum Continue?
Waleed Farouk Although often described as a defensive asset or a safe haven during crises, gold has proven over recent decades to be much more than just a "store of value." It has delivered remarkable long-term performance, sometimes outpacing other asset classes in terms of compound annual growth rate (CAGR), even amid volatile economic cycles. Gold Investors: A Winning Bet Those who bet on gold and maintained a long-term perspective have reaped substantial rewards. While gold has often remained outside the primary focus of individual investors—with most investment advice recommending no more than 5-10% allocation—statistics show that gold has been a winning choice for those who adopted it as a long-term strategic asset. From July 2015 to July 2025, gold achieved a CAGR of 12.16%. Over the past twenty years, since 2005, gold recorded an 11.51% CAGR. From July 2000 to today, gold rose from $200 to over $3,330 per ounce—a gain exceeding 1,500% in absolute value, or about 11.9% CAGR. Gold's Pattern: Patience Reveals Value Gold's price behavior is notable for its tendency toward prolonged periods of stagnation, followed by sharp and intense movements. Investors may wait years without significant returns, but the eventual payoff is often substantial when the price breaks out. Recent Performance Defies Expectations Gold's recent performance has been impressive: It has risen by more than 27% since the beginning of 2025. Over the past 12 months, it surged by more than 40%. Since the October 2022 low ($1,630), gold's price has doubled to $3,260 in less than 28 months. This means gold has delivered nearly a 100% return in under two and a half years—a result rarely matched even by the fastest-growing stocks. Reasons Behind the Surge Gold's rise can be attributed to several global factors and variables, including: Escalating geopolitical risks worldwide. Aggressive gold purchases by central banks. Weakness of the US dollar and eroding confidence in it as the dominant reserve currency. Controversial fiscal policies and trade measures under President Trump's administration. Conflicting Forecasts... But Upward Momentum Prevails Major financial institutions have varying forecasts for gold's future: Bank of America expects gold to reach $4,000 per ounce in 2026, a 20% increase from current levels. Goldman Sachs predicts gold will surpass $4,500 per ounce by the end of 2025. In contrast, Citi Research believes gold may have already peaked and expects a decline toward $3,100–$3,500 in Q3 2025, with further decreases in 2026. India: Gold Directionless for Two Months In the Indian market—the world's second-largest gold consumer—the local price currently stands at around 97,580 rupees, reflecting a sideways movement in the absence of domestic catalysts, despite the global upward trend. Gold's performance over time underscores its nature as a patient investment asset: it doesn't move every day, but it rewards those who give it time. Major gains come not from timing the market, but from persistence and consistency. While the traditional advice against over-investing in gold remains valid—it should be part of a diversified portfolio—completely ignoring it means overlooking one of the few assets that has proven its ability to withstand time, wars, crises, and even the Federal Reserve. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News Israeli-Linked Hadassah Clinic in Moscow Treats Wounded Iranian IRGC Fighters News China Launches Largest Ever Aircraft Carrier Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Videos & Features Tragedy Overshadows MC Alger Championship Celebration: One Fan Dead, 11 Injured After Stadium Fall Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War News "Tensions Escalate: Iran Probes Allegations of Indian Tech Collaboration with Israeli Intelligence" News Flights suspended at Port Sudan Airport after Drone Attacks Arts & Culture Hawass Foundation Launches 1st Course to Teach Ancient Egyptian Language Videos & Features Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream
