Friday, 20 May 2022

Bangkok Bank buttressed its capital, liquidity buffers and loan loss reserves to emerge strongest in Thailand in 2021

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Bangkok Bank reinforced its regional presence and grew its total assets through the acquisition of Indonesia’s Bank Permata in 2020. Despite the investment, the bank maintained strong capital and liquidity buffers, and kept a high level of loan loss reserves, providing a cushion against economic uncertainties.

Singapore, 21 October 2021Bangkok Bank topped the ranking of Strongest Banks By Balance Sheet in Thailand in 2021. Bangkok Bank and other leading institutions were recognised at The Asian Banker Strongest Banks By Balance Sheet (Strongest Banks) Briefing and Recognition Virtual Ceremony 2021. 

The comprehensive annual evaluation captures the quality and sustainability of the balance sheets of banks in the Asia Pacific (APAC), Middle East, and Africa regions. The ranking is based on a detailed and transparent scorecard that evaluates commercial banks and financial holding companies in six areas of balance sheet financial performance, namely the ability to scale, balance sheet growth, risk profile, profitability, asset quality, and liquidity.

Bangkok Bank remained the strongest bank in Thailand in 2021

Bangkok Bank ranked first in Thailand and placed 28th out of 500 in the Strongest Banks ranking in APAC. Its strength score stood at 3.59 out of 5, compared to the weighted average strength score of the 13 Thai banks in the ranking at 3.3. Kasikornbank and Siam Commercial Bank, the second and the third strongest banks in Thailand, placed 31st and 35th in the region, respectively.

Following the acquisition of Indonesia’s Bank Permata in 2020, Bangkok Bank’s presence in Southeast Asia has been reinforced significantly. The acquisition led to a 18.8% growth in its total assets in 2020, thus, it became the largest bank in Thailand by total assets and the sixth-largest in Southeast Asia. The contribution of international loans to the bank’s total loans went up from 17% to 23% in 2020.

The bank achieved solid capital and liquidity buffers

Bangkok Bank maintained a sound capital position with a 15.8% tier 1 capital adequacy ratio and an 18.3% total capital adequacy ratio. The bank issued $750 million worth of additional tier 1 subordinated notes under Basel III regulations in September 2020, which strengthened its capital structure.

The liquidity level of the bank also remained strong, providing a cushion against economic uncertainties. Its liquid assets to total deposits and borrowings ratio reached 45.9%, compared to 35.3% for Kasikornbank, 34.9% for Krung Thai Bank, and 37.7% for Siam Commercial Bank. The liquid assets to total deposits and borrowings ratio of all the Thai banks in the ranking averaged 34.5%. Meanwhile, the loan to deposit ratio of Bangkok Bank stood at 77.6%. Kasikornbank, Krung Thai Bank, and Siam Commercial Bank recorded a higher loan to deposit ratio of 90%, 88.7%, and 87.4%, respectively.

Sufficient provisions have been set aside in line with its prudent risk management

The bank saw its asset quality deteriorate amid the COVID-19 pandemic, but its gross non-performing loan (NPL) ratio is lower than that of Kasikornbank, Krung Thai Bank, and Siam Commercial Bank. In addition, in line with its prudent management philosophy, the bank set aside sufficient loan loss provisions and maintained a high loan loss reserves to gross non-performing loans ratio of 187%. The ratios for Kasikornbank, Krung Thai Bank, and Siam Commercial Bank were lower at 133%, 141%, and 137%, respectively.   

For video of the Strongest Banks by Balance Sheet Briefing, click here

For the evaluation criteria and full ranking list of Strongest Banks click here

 

About the Strongest Banks By Balance Sheet programme

The Asian Banker Strongest Banks By Balance Sheet is an annual assessment of the financial and business performance of the banking industry in the Asia Pacific, Middle East, and Africa regions. The assessment ranks the top performing banks in each country or territory by strength, an evaluation that is based on a belief that a strong bank demonstrates long-term profitability from its core businesses.

The scope and coverage for The Asian Banker Strongest Banks By Balance Sheet come from both the mature markets and the most promising emerging markets in the regions. The focus of the assessment is on commercial banks and financial holding companies with a significant proportion of activity in commercial banking. The assessment does not include central banks, policy banks or finance companies.

The winners are determined using a scorecard approach based on six crucial performance indicators rated on a scale of 0-5: scale, balance sheet growth, risk profile, profitability, asset quality, and liquidity.

About The Asian Banker

The Asian Banker is the region’s most authoritative provider of strategic business intelligence to the financial services community. The global research company has offices in Singapore, Malaysia, Manila, Hong Kong, Beijing, and Dubai, as well as representatives in London, New York, and San Francisco. It has a business model that revolves around three core business lines: publications, research services and forums. The company’s website is www.theasianbanker.com.

For further information, please contact:

Olive Sun

Sales Administration Manager

osun@theasianbanker.com

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