THAILAND Trends and Developments Contributed by: Jessada Sawatdipong, Sarunporn Chaianant and Supawich Nimmansomboon, Chandler Mori Hamada
Overview of Thailand’s Banking and Financial Market Thailand’s banking sector has continued to demon- strate resilience despite ongoing economic head- winds. According to the Bank of Thailand (BoT), over- all loan growth has slowed, with large corporate loans showing expansion while SME and consumer loans have declined amid heightened credit risks. Although non-performing loans (NPLs) have increased slightly, the NPL ratio has remained stable, reflecting prudent risk management across the sector. Currently, the banking and financial market is con- centrating on sectors that are driven by government support, technological advancement and Thailand’s commitment to environmental sustainability – most notably digital banking, renewable energy and infra- structure. The digital finance sector is particularly dynamic, with both operators and consumers show- ing strong interest in fintech and virtual banking solu- tions. This momentum was further highlighted by the BoT’s recent approval of Thailand’s first virtual bank licensees, which include ACM Holding Company Lim- ited, a consortium of Krung Thai Bank, AIS and PTT Oil and Retail Business (PTTOR), as well as a group led by SCB X in partnership with WeTechnology and KakaoBank. Meanwhile, renewable energy and infrastructure pro- jects are attracting increased financing, reflecting Thailand’s ongoing commitment to sustainability and infrastructure development. The data centre sector is also experiencing robust growth, driven by strong demand for digital infrastructure, cloud services and AI capabilities. Such a rising trend aligns with the requirements for green loans and sustainability-linked lending of financial institutions, although project oper- ators remain subject to rigorous scrutiny and must continue to meet strict requirements to ensure ongo- ing compliance with ESG standards set by financial institutions. In contrast, the automotive and traditional manufacturing sectors have weakened, affected by global supply chain disruptions and reduced demand. The retail and hospitality segments also continue to face challenges due to tighter credit conditions and slow income recovery, prompting banks to adopt a more cautious approach to lending.
Thailand Taxonomy Phase 2 (Final Version) The working group on sustainable finance – compris- ing the Department of Climate Change and Environ- ment, the BoT, the Securities and Exchange Commis- sion (SEC), the Stock Exchange of Thailand and other relevant agencies – has released the final version of Thailand Taxonomy Phase 2. This new phase expands the Taxonomy, which covered only energy and trans- port in Phase, to also include the agriculture, con- struction and real estate, manufacturing and waste management sectors, all of which are key sources of greenhouse gas emissions. Developed through exten- sive consultations and a public hearing process, Tax- onomy Phase 2 reflects stakeholder feedback, includ- ing calls for environmental certification standards and guidance tailored to the Thai context. The framework sets out six environmental objectives: climate change mitigation, climate change adaptation, sustainable use of water, sustainable use of resources and the transition to a circular economy, pollution prevention and control, and biodiversity conservation and resto- ration. The final document will be available for down- load from 27 May 2025, together with a seminar titled “Thailand Taxonomy 2.0: Driving the Thai Economy Towards Sustainability” aimed at promoting aware- ness and adoption. The initiative is expected to serve as a central reference point for policymakers, inves- tors, and businesses in defining and supporting envi- ronmentally sustainable activities, thereby advancing Thailand’s transition to a sustainable economy. Thailand’s Draft Financial Hub Act: Elevating the Nation to a Regional Financial Center The Thai government has advanced the Draft Finan- cial Hub Act with the goal of positioning the country as a leading financial hub in Asia and beyond. The Cabinet approved the bill in principle in early Febru- ary 2025, a move that reflects Thailand’s ambition to strengthen its role in international finance. The draft legislation spans nine chapters and 96 sections, set- ting out a comprehensive framework for governance, regulation and incentives to attract global players. The draft law defines eight categories of targeted financial businesses: commercial banking, payment services, securities, futures trading, digital assets, insurance, reinsurance brokerage, and other finan- cial or supporting services as designated. A common
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