Thai banks will hardly be hurt by FIDF fee increase

Earlier today the local media report that the Ministry of Finance, Bank of Thailand and the Thai Bankers Association agreed to increased the Financial Institutions Development Fund fees from 0.4% to 0.47% for deposits (0.46% to fund FIDF debt and 0.01% to the Deposit Protection Agency). These new rates are expected to be implemented by 31 July this year.

So..

  • Banks will rally short term as the rate increases aren’t as higher as previously expected (large banks are expected to only have a 5% decrease in EPS 2012 as a result of this, but TMB and TISCO will be hurt far more b/c they rely on B/E funding.
  • The banks will probably pass these additional costs onto the consumer to protect their Net Interest Margins. Yay! I had nothing to do with the Asian Financial Crisis and now I get to foot part of the bill! Thanks Thai government and bankers!
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