Banking - Thailand

Thailand

In 2024, the projected Net Interest Income in the Banking market of Thailand is estimated to reach US$40.71bn.
Traditional Banks are expected to dominate this market segment, with a projected market volume of US$38.84bn in the same year.
Looking ahead, the Net Interest Income is anticipated to display an annual growth rate (CAGR 2024-2028) of 2.05%, resulting in a market volume of US$44.15bn by 2028.
In comparison to other countries, in China is forecasted to generate the highest Net Interest Income, amounting to US$5,659.0bn in 2024.
Thailand's banking market has witnessed a surge in digital banking services, catering to the increasing tech-savvy population.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.

Structure:

The market consists of two segments:
- The Traditional Banking market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the Retail & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

Amidst the vibrant and evolving landscape of the Banking market in Thailand, there are several key trends and developments that are shaping the industry.

Customer preferences: Customers in Thailand are increasingly gravitating towards digital banking solutions, driven by the convenience and accessibility they offer. With the rise of smartphone penetration and internet usage in the country, consumers are showing a strong preference for online banking services. This shift towards digital channels is not unique to Thailand but is reflective of a global trend towards digitalization in the banking sector.

Trends in the market: One notable trend in the Thai banking market is the growing emphasis on sustainable and socially responsible banking practices. As environmental and social issues gain prominence globally, Thai banks are aligning their strategies to incorporate ESG (Environmental, Social, and Governance) principles. This trend is in line with the broader movement towards sustainable finance in the region, driven by increasing awareness and regulatory pressures.

Local special circumstances: Thailand's banking market is characterized by a high level of competition among both domestic and international players. This competitive landscape has led banks to innovate and differentiate their offerings to attract and retain customers. Additionally, the presence of a large unbanked population in rural areas presents both challenges and opportunities for banks to expand their reach through innovative financial inclusion initiatives.

Underlying macroeconomic factors: The macroeconomic environment in Thailand, including factors such as GDP growth, inflation rates, and interest rates, plays a significant role in shaping the banking market. Economic stability and growth prospects influence consumer confidence, investment decisions, and overall demand for banking services. As Thailand continues to navigate through economic uncertainties, banks are adapting their strategies to mitigate risks and capitalize on emerging opportunities in the market.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.