NPL ratio of every bank fell from 3Q15, except for KBANK and TMB.
The biggest development for Thai banks in 4Q15, according to Maybank Kim Eng, was the improvement in credit quality. For the banks under their coverage, gross NPL was THB335b at the end of 4Q15, a THB22b or 6.2% QoQ decline from 3Q15.
"However, the seasonality effect possibly played a role here as banks usually writeoff some bad debts at year-end. We note that the NPL ratio of every bank fell from 3Q15, except for KBANK and TMB. The loan book of these two banks is concentrated on SMEs, which have been hit the hardest by the economic downturn. The weakness in this group may continue for some time. But, the overall improvement in the sector’s credit quality raises our confidence in the sector outlook this year."
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