Growth will be moderate despite the increase in loans.
Analysts expect net interest margin (NIM) for most Thai banks to decrease slightly. According to Maybank Kim Eng, only small banks should continue to see NIM expansion but not by much as there’s limited room for lower funding cost.
Without NIM expansion, Thai banks' net interest income should grow only moderately, despite the acceleration in loan growth.
"We look for 3.8% next year, the same growth rate as this year. NII should rise noticeably stronger in 2019 when BOT is expected to raise therate, boosting NIM. Note that small banks, whose loan portfolios are 70% made up of fixed-rate auto loans, should continue to see higher NII growth rate. TISCO’s NII is considerably higher thanks to SCBT’s portfolio acquisition, which will begin to contribute from 4Q17 onwards," added Maybank Kim Eng.
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