Thai banks are looking to expand their business in the ASEAN region due to the economic growth potential, according to Fitch Ratings Thailand.
In 2023, large local banks saw a significant increase in regional business expansion after making multiple cross-border acquisitions, leading to substantial overseas loan growth between 2020 and 2022.
The international loan portfolio of domestic systemically important banks (D-SIBs) in Thailand grew to 10% of total outstanding loans, up from 6% in 2020.
Thai banks Bangkok Bank (BBL), Kasikornbank (KBank), Siam Commercial Bank (SCB), and Bank of Ayudhya (Krungsri) have expanded their operations into neighboring countries.
However, the foreign operations of these banks make up less than 1% of their total assets, except for BBL which has double-digit figures due to extensive experience.
With strong economic growth in Vietnam, Indonesia, and the Philippines, there are significant opportunities for Thai banks to expand regionally.
Fitch expects Thai banks to expand internationally through branch establishment and acquisitions to diversify revenue streams and utilize local expertise in foreign markets.
Ms. Jindarat of Fitch believes this trend will resume in 2023.
In February, SCB announced the acquisition of a 100% share in Home Credit Vietnam, marking a recent example of Thai banks' international growth.