Category Archives: FINANCE

Thai Banks Mostly Advance in Q1

Thailand’s banks reported their first quarter performance with most of them advancing.

In an infographic released by the Stock Exchange of Thailand, eight out of the ten analyzed banks have excelled while one has remained the same and another dropped drastically.

The ten banks have released a combined net profit report for the first quarter of 2017. In it, they announced the total net profit of 55.71 billion baht. All in all, it was an 8% increase compared to the performance in the same time of last year.

The top three in terms of net profit are Siam Commercial Bank (SCB), Kasikornbank (KBank), and Krungthai Bank which have 11.91 billion baht, 10.17 billion baht, and 8.53 billion baht respectively. Meanwhile, CIMB Thai Bank suffered the biggest loss with a 63% drop in net earnings compared to their performance in the same quarter of last year.

The chief executive officer and president of SCB, Arthid Nanthawithaya relayed the satisfaction of their firm with its performance for the first quarter in a press release. The 11.91 billion baht net profit of the banking firm was a 13% increase from last year’s performance in the same time period. According to Nanthawithaya, the increase can be attributed to the hike in net interest income, net fee, and service income. He laid out future plans in their press release saying, “We are focusing on developing staff capabilities so they can adapt to changes and respond to new business models and client needs in the future.”

Second placer KBank’s 10.17 billion baht net profit increased by 5.45% compared to last year’s first quarter performance. The president of the banking firm, Predee Daochai, expressed their positive outlook for this year. The higher interest income is the reason why his bank performed so well.

Most banks see a positive outlook for the rest of 2017.

Fintech Taking Over Thai Banking Figures

The Bank of Thailand has released data about the country’s physical bank branches. In the table entitled “Physical Branches in Firing Line”, the BoT showed how the various banks in Thailand have fared in terms of branching out.

As seen on the table, there is a general decline in physical branches. Most are coming from Kasikornbank which lost 17 branches and Thanachart Bank which lost 16 branches. The biggest losers are the fourth and fifth largest bank in Thailand respectively.

Meanwhile, both Krungthai Bank and TMB Bank were down by three branches. The Thai branch of Standard Chartered dropped by two while Siam Commercial Bank lost one branch.

The biggest gainer is Bangkok Bank which added three branches while Thai Credit Retail Bank, ICBC Bank, and Bank of Ayudhya expanded by only one branch.

According to experts this decline in statistics can be attributed to the growing presence of financial technology or fintech. In short, more and more Thais are going digital. As a consequence, traditional banks are essentially forced to go online to keep up with competition. A senior official of the Bank of Thailand was interviewed by the Bangkok Post saying that the “fast-growing fintech is shifting consumer behaviour towards the digital banking channel and forcing commercial banks to pare down their brick-and-mortar branch networks.”

BoT’s assistant governor for financial institutions policy group, Somboon Chitphentom commented on the matter saying, “Since the beginning of this year, most commercial banks have shuttered more branches than they have opened to adapt to the change in customer behaviour and lifestyle.”

He further explained that technologies are gaining traction all over the financial industry. Payment solutions such as cost-efficient approaches are being utilized to attract and maintain a solid user base. He said, “As a result, these banks have adapted by reconsidering their branch size, relocating existing branches and adding more service channels such as mobile or internet.”

Thai commercial banks are gradually realizing the importance of fintech and they are adapting to stay relevant in the financial industry.

Thai Bank Considers Digital Makeover To Keep Up with Fintech

The oldest local Thai lender, Siam Commercial Bank Plc has announced its plans to revamp its financial technology to boost its products and services.

Siam Commercial Bank is reportedly modernizing its technology, specifically its digital payment platform, by partnering with tech giants Microsoft, International Business Machines (IBM), and Accenture. The century-old bank aims to create applications and brand them as a lifestyle apps that will suit all kinds of clients in their daily activities such as going to the cinema, eating out, and buying goods and services.

The chief executive officer of Siam Commercial Bank, Arthid Nanthawithaya was quoted in an interview saying that they want to go beyond the purpose of banking. He said, “I’m spending my time on every single detail of the new digital platform that we are going to launch very soon, in the next few months. What I want one day is that you’ll see SCB’s digital platform isn’t just a banking platform; this is how you reach out, this is how you gain customers.”

The move from Thailand’s oldest bank has been prompted by the fierce competition from other banks including Kasikornbank Plc who also have entered the digital fray.

However, the competition doesn’t end there. Non-banking digital payment platforms have been popping up online and it is causing a major rift between banks and potential clients. The ease and convenience that they provide have become a threat to the traditional banks.

The development of the new digital payment platform of Siam Commercial Bank is being processed at a time of reassessment in the institution. Mr Arthid confirms, “Further easing of regulations will open the gates for top global fintech providers such as Alibaba and Tencent. That fear and threat has woken up big Thai banks.”

This initiative is part of Siam Commercial Bank’s transformation into a tech-friendly firm. Last September, the famous bank announced that it has allocated $20 billion baht for technology upgrades which will be spread out within the coming two to three years.

Thailand’s CIMB Securities head of research, Kasem Prunratanamala, gave his two cents saying, “Early investment in digital banking will be costly with low return, but it’s a requirement for them to fend off any possible major disruption from non-bank fintech operators.”

While cash remains the prevailing means of transaction, online payments have skyrocketed in 2016 with roughly 35 million baht in circulation. Siam Commercial Bank wants to get into this market before it’s too late.

Thailand Assets Are Safe Haven Says BoT Governor

The Bank of Thailand (BoT) governor Veerathai Santiprabhob says that Thailand’s central bank has the tools and capabilities to keep the baht tamed.

In a seminar held last February 23, the chief of the central bank spoke in front of an audience hosted by the Land and Houses Bank. He emphasized that BoT is capable of curbing capital flows if the need arises using various financial instruments. Because of this, he believes that Thai assets and the baht can be considered as safe havens as they are supported by foreign reserves across the globe.

In an article of the Bangkok Post, Mr Veerathai is quoted saying, “Thailand currently has reserves of around US$200 billion, including US dollar forwards, representing the 12th-highest foreign reserves in the world. These kind of money flows into the country strengthen the baht, which, in our opinion, is not good for the Thai economy.”

Money flows in and out of Thailand at a steady pace. This movements cause volatility for the baht but it is also seen as a boost for foreign investments. Thai capital and bond markets are benefiting from this in the short-term.

The Thai baht climbed by 0.03 to 34.99 against the US dollar. Reuters data shows that the national currency added a total of 2.4% so far for this year. In comparison, the Indonesian rupiah and the Malaysian ringgit only advanced by 0.9%.

As quoted by the Bangkok Post, Mr Veerathai further explained, “These kind of money flows into the country strengthen the baht, which, in our opinion, is not good for the Thai economy. In the current stage of a highly fluctuating world, it’s the central bank’s duty to have a wide range of policy instruments in its menu to be ready to use.”

He confirmed that if the baht needed it, the BoT can utilize its policy instruments to help control baht fluctuations as opposed to using a floating exchange rate.

All in all, Mr Veerathai expressed confidence in the economy of Thailand. He hopes for the nation to have a better recovery for this year after the rough patch last 2016 when multiple geopolitical events occurred including the death of their revered king. The BoT set the GDP forecast for 2017 at 3.2%.

On March 29, BoT’s Monetary Policy Committee will examine the forecast and announce the predictions for next year, 2018.

E-payment Launched in Thailand

Thailand launched the first e-payment system in Southeast Asia.

A collaboration among the Finance Ministry, the Bank of Thailand (BoT) and commercial banks has resulted in the launch of the customer-to-customer (C2C) electronic payment system. The e-payment was launched last January 27 according to schedule. On March 1, the next step will be carried out namely the business-to-business platform (B2B).

Finance Minister Apisak Tantivorawong confirmed the successful launch of the system following an initial delay. The C2C e-payments was supposed to be launched last October. However, because of technology difficulties, the release was postponed. The Thai Bank Association (TBA) incorporated new technology into the system before deeming it ready this month.

The C2C e-payment system was developed by the collective effort of the Finance Ministry, the BoT, and TBA. Mr Apisak emphasized how C2C will help in achieving the goal of Thailand to become a cashless society.

Thailand is currently implementing Thailand 4.0, an economic model that focuses on innovation and technology to improve business and grow the fintech industry. Under Thailand 4.0 Thais will have increased income while businesses will start giving importance to the digital industry.

Mr Apisak commented on the matter saying, “We [the Finance Ministry, the BoT and the TBA] have been working hard over the past year to push the development to reach this point. It is very important, as every country in the world is moving in this direction, and we are the first country in Southeast Asia to be able to launch an e-payment system.”

Meanwhile, B2B, slated to be launched by March, has already started accepting clients. Commercial banks have started employing trade register number and setting up B2B accounts. Services will be officially available on the 1st of March.

The Revenue Department will start accepting tax invoices via email at the same day of B2B’s launch. Mr Apisak expressed enthusiasm saying, “In the future, the e-tax system will be geared towards a fully comprehensive digital system.”

Capital markets will, however, have to wait. The national e-payment system will need 12-18 months for system adjustments to be able to integrate it to the market clearing and settlement system.

B20 Billion Loan for Elderly to be Backed by GH Bank

The Government Housing Bank (GH Bank) is loaning a total of 20 billion baht for pre-financing and mortgages of the elderly of Thailand. The chief of the bank confirmed the approaching deal.

The president of GH Bank, Chatchai Sirilai, said that 50% of the total loan will be designated to pre-financing the residences of the elderly. He added that the bank is already in discussion with the National Housing Authority and the property developers.

Mr Chatchai commented about the project saying, “Next year we will focus on supporting the development of homes for the elderly. GH Bank will provide loans to both property developers and the general public. The loan amount of 20 billion baht has not taken reverse mortgages into account, as the bank can only start offering reverse mortgage services after the law is amended. That issue is currently considered by the Finance Ministry.”

The lending has already began with 1 million baht out of the 20 billion baht already available for those who are taking care of their old parents. Despite this, the lending amount remains marginal because of homeowners who prefer the housing loan package offered on the 63rd anniversary of GH Bank.

The president said that they had set a new 2016 loan target at 170 billion baht. This is realistic goal as the bank has already acquired a total of 151 billion baht in loans as of December 13.

The GH Bank is a financial firm built under the command of the late King Bhumibol Adulyadej on January 9, 1953. King Bhumibol Adulyadej aimed for the bank to support housing finance the Thai people. It used to act solely as a housing developer but today, it is a leading financial institution in the country with collaborative agreements and projects with other branches of the government such as the Social Security Office, the National Housing Authority, and the Government Pension Fund. The GH Bank mostly focuses on housing loan projects such as the ones mentioned in this article.

What’s Happening With Thailand’s Taxes?

Taxes in Thailand are going on a roller coaster ride and we think you should know all about it. Here are three things that are happening to Thailand’s taxes right now.

1. Thais May Pay Taxes via Credit Card Soon
Thailand is apparently ready to accept bank cards when it comes to paying taxes. The Revenue Department has signed a memorandum of understanding (MoU) with a private company. This memorandum will allow bills payment to be made through credit cards. The company has developed an online application entitled “easyBills” which will allow taxpayers to file their bills online and pay using credit cards issued by Thailand banks.

The Revenue Department’s deputy director-general, Phadcha Pongkeeratiyu was the main representative at the signing ceremony. The MoU is with the company, 2C2P (Thailand) Co who developed the new tax payment channel. Ms Phadcha commented that the project was a collaborative effort between a number of public and private organizations that are in charge of tax payments. With this project, Ms Phadcha expects a boost in electronic tax filing. She said that Thailand aims to compete in terms of electronic transactions and payments so as to be at par with international standards.

Despite this advancement, taxpayers can still opt to pay at banks, post offices, and department stores.

2. New Thai King, Maha Vajiralongkorn May Get a $3.5 Billion Inheritance Tax
The successor and son of the iconic king of Thailand who was the world’s longest-reigning monarch could be facing a huge amount of tax owed to Germany.

According to the German magazine, Manager Magazin, the assets inherited from King Bhumibol Adulyadej, which amounts to $10.6 billion, could be taxed by as much as $3.5 billion. This is because the current king, Maha Vajiralongkorn, has two villas in the state of Bavaria. Therefore, he is subject to an inheritance tax.

The tax is expected to be paid to avoid any tension with Germany according to Paul Chambers, an expert in international relations at the Institute of Southeast Asian Affairs in Chiang Mai. He said, “If the German authorities insist upon the Crown Prince paying an inheritance tax… then I assume that Thai state authorities will cry foul and pick up the tab, given that this issue would be a political ‘hot potato’ in Thailand.”

3. Thais Could Have a Holiday Tax Break
The government of Thailand is speculated to offer tax breaks once more this holiday season. The implementation has already been tried last year when the government gave its citizens a tax break of up to 15,000 baht in the last seven days of 2015. The move boosted the full-year GDP of Thailand for 2015 by 0.2 points.

This year, it could happen again. The Finance Ministry is considering to do this again for an estimated two weeks to one month period as a stimulation for consumer spending all over the country.

Thailand Places Third in Asean in Ease of Doing Business

Thailand has been ranked third among other Asean countries in terms of ease of doing business. The official ranking was researched and done by the World Bank’s flagship publication, the “Doing Business 2017.”

The publication conducted a survey which included 190 countries across the globe. In the ranking of all countries, Thailand comes in at number 46 for the best destination to do business in. The top ten includes notable countries from East Asia and the Pacific Region namely New Zealand who bagged the first place while Singapore got second. 4th place goes to Hong Kong SAR, China while the Republic of Korea got fifth place.

In the Asean Group where Thailand is ranked third, Singapore comes in first place.

“Doing Business 2017” has noted that Thailand has vastly improved in the field of business startups. In nearly all categories, the Southeast Asian country increased in ranking. For the Starting a Business category, it jumped to 78th from 96th. In the category of Getting Credit, Thailand increased 15 spots from 97th to 82nd. Meanwhile, Thailand hiked from 36th to 27th place in terms of Protecting Minority Investors. In the Resolving Insolvency category, the country boost to 23rd place from 49th last year.

Other categories where Thailand didn’t excel as much included Enforcing Contracts, Dealing with Construction Permits, Trading across Borders, Paying Taxes, Getting Electricity, Enforcing Contracts, and Registering Property. This improvement areas can be attributed to the remaining challenges that Thailand needs to face. In the country, a 12-hour compliance with border regulations for exports takes as much as 57 hours. Tax audit-compliance are also steep in Thailand. Despite this remaining challenges, Thailand made significant progress.

“Thailand is steadily making progress to ease the process of doing business. Continuing focus on reforms to promote a better business environment, in addition to implementing public infrastructure investments, developing skilled-workers through quality education, and promoting innovations, can further improve the country’s competitiveness, which will lead to more and better jobs for many Thai people.” according to Ulrich Zachau, World Bank Country Director for Thailand.

Death of Thailand King Dims the Country’s Economic Future

King Bhumibol Adulyadej is dead. The longest reigning monarch has ended his 70-year regime after succumbing to a multitude of ailments that he has been enduring for several months now.

The king died peacefully at 3:52 p.m. in Siriraj Hospital according to the Royal Palace. Announcements were immediately made about the new rules to observe as the country enters a period of mourning. The Thai cabinet put in place a 30-day period of grieving where the whole nation is expected to hold off any kind joyous, celebratory, and jubilant activities. The friday that followed which was October 14 was declared a holiday for all government offices. Meanwhile, civil servants are now required to wear black for a one year starting friday. The rest of the public is encouraged to wear only black or white clothes.

This string of events triggered by the King’s death is seen as a shadow cast over Thailand’s already struggling economy. First off, analysts and economists see the period of mourning as an indication of significantly lower economic activity that will definitely have an effect on the country’s growth. This event is also expected to add weight to the already slowing productivity and lackluster workforce of Thailand.

The King is a beloved figure seen as an icon of hope for the country. Prime minister and junta chief Prayuth Chan-ocha said, however, that the business world will resume its activities as normal. In fact, Thailand’s stock market has closed 4.6% higher following a series of slumps in the previous days. The Prime minister was able to ease some of the worries of traders as he assured them of the succession of Crown Prince Maha Vajiralongkorn in the coming days.

While the head of the country struggles to maintain normalcy in the financial industry, it is a different story in the streets of Thailand. The mourning period is already expected to drag tourism which is one of the few industries left that is driving the economic growth of Thailand up after the military junta took control last May 2014. It accounts for 10% of the country’s economy. Concerts have already been canceled and festivals have been postponed. Add to that the closing of many entertainment hubs such as restaurants, the red light district, bars, and other establishments. It appears that the Thai economy will definitely take a hit.

With the struggle for political leaders remaining undetermined and the effects of the succession seemingly vague for now, the country is expected to remain in the dark. As the country continues to mourn the loss of their revered leader, the future of the Thai economy remains unclear.

Everything You Need to Know About Thailand’s Baht

Thailand is a Southeast Asian country known for its rich culture, famous delicacies, breathtaking festivals, cheap goodies, and friendly citizens. It’s no wonder it’s one of the hottest tourist spots in Asia. If you ever plan on conquering this country, you have to know it’s money.

The Baht
The official currency of Thailand is the Thai Baht. It is equivalent to 100 satang. At the time of writing, it matches the dollar at an estimated 35 Thai Baht for every dollar. You can use a currency converter online to know its current exchange rate.

Coins are denominated according to the following: 1 baht, 2 baht, 5 baht, 10 baht, 25 satang and, 50 satang. It is worth noting that 25 and 50 satang are small values that are now rare in circulation. The 1, 2, and 5 baht coins are made of silver while the 10 baht coin is made brass with a silver ring around it. The 25 and 50 satang are made of brass.

Banknotes or bills are denominated according to the following: 20, 50, 100, 500, and 1000 baht. The bills differ in both color and size. The 20 baht bill is the smallest is colored green. Next is the 50 baht bill which is blue. Still bigger is the 100 baht bill colored red. The 500 baht bill us purple. The biggest is the white 1000 baht bill.

Both coins and bills are printed with the picture of King Bhumibol Adulyadej in the front. The back features various iconic landmarks and people of the country.

Credit Cards and ATMs
Thailand is a market hub full of shops that carry all kinds of goods at affordable prices. Many tourists come to the country to shop. The good news is that most outlets carry credit cards. Visa, MasterCard, American Express, and other cards are accepted. However, the interest charge might be costly due to international transactions being tacked a 2% to 5% charge by credit card companies. Even worse, there are a lot of shops that will charge you on top of the international transaction fee. These surcharges are typically added at 3% for Visa or Mastercard and 5% for American Express.

You might think that using the ATM will be better but it has its own disadvantages. Acquiring cash overseas might charge you more because of conversion fees. What’s more is that Thai banks now charge 200 baht for using foreign ATM cards.