Bangkok Bank maintained ample liquidity and robust loss-absorbing buffers amid pandemic
- Bangkok Bank tops the Strongest Banks by Balance Sheet ranking in Thailand
- The bank gained scale while demonstrating strong liquidity
- The bank worked with authorities to provide financial support to businesses
26 February 2021, Singapore – Bangkok Bank topped the ranking of Strongest Banks by Balance Sheet in Thailand in 2020. Bangkok Bank and other banks were recognised at the Strongest Banks by Balance Sheet Briefing and Recognition Virtual Ceremony 2020 presented by The Asian Banker. This is the most comprehensive annual evaluation that 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 (banks) in six areas of balance sheet financial performance, namely the ability to scale, balance sheet growth, risk profile, profitability, asset quality, and liquidity. For Strongest Banks by Balance Sheet 2020, the financial information in the first half of 2020 (1H 2020) was collated and incorporated into the assessment of how banks performed during the COVID-19 pandemic.
Bangkok Bank tops ranking of strongest banks by balance sheet in Thailand
The bank reinforced its regional position through acquisition and became the largest bank by total assets in Thailand. In addition to stronger balance sheet growth, it also recorded high liquid assets to total deposits and borrowings ratio of above 40% and loan loss reserves (LLR) to gross non-performing loans ratio of 163% which are instrumental in enabling the bank to obtain impressive results in its balance sheet.
Thaweelap Rittapirom, executive director and executive vice president at Bangkok Bank, in his acceptance speech said, “At Bangkok Bank, we place great importance on having a strong balance sheet and maintaining a high-quality portfolio especially during such periods of volatility and economic downturn”.
The following were especially considered in the evaluation of the banks’ balance sheet strength and resilience: how accelerated digitalisation are enhancing bank balance sheet strength, the impact of debt moratoria, rescheduling and financial aid measures introduced by regulators on bank asset quality, how banks are growing alternative sources of income amid the record low interest rate, and the strategic economic relief and regulatory support in response to the crisis and effect on the pace and scale of recovery.
The bank gained scale while demonstrating strong liquidity
The average asset growth of Asia Pacific banks on the list accelerated to 10.3% year-on-year (YoY) at the end of 1H FY2020 from 6.6% in 1H FY2019. Across the region, Thai banks saw balance sheet growth accelerate the most which can be largely attributed to mergers and acquisitions. Bangkok Bank completed the acquisition of an 89.12% stake in Indonesia’s Bank Permata in May 2020 making it the largest bank by total assets in Thailand and helped reinforce the bank’s position in Southeast Asia.
With the strength score of 3.6 out of 5, Bangkok Bank is the strongest bank in Thailand and took the 25th spot in the Strongest Banks by Balance Sheet in the APAC. Kasikornbank and Siam Commercial Bank placed second and third, respectively in Thailand. Bangkok Bank maintained a stronger liquidity position than these two banks as it recorded higher liquid assets to total deposits and borrowings ratio. Meanwhile, the loan to deposit ratio of Bangkok Bank stood at 76.3% lower than Kasikornbank (86.4%) and Siam Commercial Bank (89.9%).
The bank worked with authorities to provide financial support to businesses
Thaweelap said, “During the lockdown period we had to work closely with the government in the measures that they have introduced. Banking played a key role in stabilising the economy in terms of working with the authorities, providing financial aid to the businesses through soft loan, and restructuring programmes”.
“We need to work together in reviving the economy. We have seen a lot of interesting trends from this pandemic. We have seen digital adoption clearly in Thailand and promise to continue to invest more in infrastructure and with the chain of working patterns, behaviour of the customer, and the need for new offering. Thus, we see these as good opportunities for Bangkok Bank to continue to move around the digital journey to meet the needs of customers. Looking forward, we still have the positive view of reviving the economy with the coming of the vaccine and the joint effort between the government and the business sector.”
About the 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 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 Singapore-based 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
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Ms. Sue Kim