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!