Fitch: Thai banks resilient

Fitch Ratings said that despite recent political unrest in Thailand, local banks continued to report resilient performance in the second quarter of 2010 following a strong first half of the year.

The seven major Thai banks' aggregate net profit remained stable in the second quarter, up 4.1% quarter-over-quarter, helped by a decline in loan loss provisions, Fitch said.

In the first half of the year, the aggregate net profit of Bangkok Bank PCL, which is rated BBB+ with a stable view, Krung Thai Bank PCL, which is rated BBB with a stable view, Kasikornbank PCL, which is rated BBB+ with a stable view, Siam Commercial Bank PCL, which is rated BBB+ with a stable view, Bank of Ayudhya PCL, which is rated BBB with a stable view, TMB Bank PCL, which is rated BBB- with a negative view, and Siam City Bank PCL, which is rated BB on Rating Watch positive, amounted to 49.1 billion in Thai baht, or a 27% year-over-year increase.

The performance of the Thai banks continues to show resilience with most reporting stable net profit helped by lower provisions and loan growth, Fitch said.

Despite the weak operating environment, there has been no significant asset quality deterioration, the agency said.

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