Other than the simple reason that Thai banks corporate income tax rate is dropping from 30% last to 23% this year to 20% next year which has been a boon to their bottom line (remember the thai banking sector is really the only sector on the market paying full corporate income tax rates) the two main reasons for their outstanding growth in the past few years has been the growth of consumer banking and the growth of non-interest fees, especially with insurance as a main growth driver, see below for pretty charts.
- Consumer loans have more than doubled over the past 7 years, how is this a good thing? They can charge consumers extremely high interest rates capped @ 28%
- is it safe? Well the majority of consumer loans are secured i.e. mortgages (48%) and car leasing (26%)
- Income from consumer banking is now 51% of non-interest income