Bank Of Thailand Research Articles

Decision-Making Framework for Improving Bank Performance in Emerging Markets: The Analysis of AHP-TOPSIS and AHP-GRA Models

Abstract This study utilizes the Analytic Hierarchy Process (AHP) in combination with the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) and Grey Relational Analysis (GRA) models to thoroughly assess the performance of banks in China, India, Pakistan, and Thailand. The integrated results offer significant insights into the relative rankings of various banks in each country. In China, Bank of China Ltd (BOC) emerges as the top performer, setting a benchmark for others. Similarly, in India, the State Bank of India is consistently identified as the leading bank. The National Bank of Pakistan stands out as the top performer in Pakistan. In Thailand, despite minor deviations in results, Kasikornbank PCL (KBANK) consistently shows strong performance. The alignment of results between AHP-TOPSIS and AHP-GRA underscores the reliability of both models, providing stakeholders and decision-makers with a comprehensive understanding of bank performance. This enables them to identify benchmarks, leverage strengths, and address areas for improvement within each country’s banking sector.

Examining the Effect of Bank Health Level towards Stock Return of Commercial Banks in Three-Selected ASEAN Countries

Today, various main factors, including the banking sector, support a country's economy. The growth and performance of banks in a country are factors in measuring the country's economic growth. The increasing number of banking stocks traded in ASEAN countries proves banking development. However, since middle-to-low-income countries dominate ASEAN, it opens up a greater risk to the volatility of bank stock returns because of economic turmoil. Non-performing loans (NPL), Good Corporate Governance (GCG), Return on Assets (ROA), and Capital Adequacy Ratio (CAR) are found to influence bank stock return in some studies, but other similar studies show the opposite. Therefore, this study uses 28 banks in ASEAN countries as a sample, consisting of 10 Indonesian banks, 8 Malaysian banks, and 10 Thailand banks. Data analysis uses regression analysis with moderated regression analysis (MRA) and discrimination tests. The result shows NPL and GCG have no significant effect on bank stock return, ROA has a positive and significant effect, and CAR has a negative and significant effect. Price to Book Value (PBV) has a positive and significant effect on bank stock return but can only moderate ROA on stock return. The discrimination test shows that ASEAN countries' NPL, GCG, ROA, and CAR differ significantly. Therefore, banks in ASEAN ought to maintain their health through these factors to maximize their stock return.

Twitter content strategies to maximize engagement: The case of Thai Banks

Purpose– This study aims to examine how the marketer-generated content (MGC) strategies of banks affect their followers’ engagement on Twitter. Design/methodology/approach – A sample of MGC tweets from official Twitter accounts of both public and private banks in Thailand was collected using a Twitter analytic tool. Message features, content, intent, and post engagement were manually and automatically extracted from these tweets. Proposed relationships were analyzed using descriptive statistics and hierarchical regression analyses. Findings – The results indicate the negative influences of two control variables, media type (text), timing (evening), and some sub-types of information-sharing content and emotion-evoking content, as well as positive impacts of public bank type, some message features i.e., hashtags and mentions, media type, some content regarding emotion-evoking and action-inducing, and intent (request). Practical implications – Useful guidance for bank marketers to maximize engagement is offered. The suggestion for revising bank content strategies on Twitter are presented. Originality/value – This study examines the content strategy from a different perspective, which has rarely been employed in the literature. Additionally, this study reveals the Twitter content strategies of the Thai financial sector, which is a crucial sector supporting others. Understanding consumer behavioral engagement could help them to publish the right MGCs.

IMPLIKASI PENERAPAN IFRS 9 PADA DAYA PREDIKSI CKPN TERHADAP KERUGIAN KREDIT BANK

Changes in accounting standards affect the formation of loan loss provisions (LLP), which impacts bank reporting of actual credit losses. It is assumed that IFRS 9 with a forward-looking approach, produces a higher predictive power for LLP than it according to a backward-looking approach (IAS 39). This study compares the ability of LLP to predict bank actual credit losses between the periods of IAS 39 and IFRS 9. For this purpose, the study observes quarterly data of 3,022 data originating from a sample of banks in Indonesia (2,461) and Thailand (561) for the period IAS 39 (2018–2019) and IFRS 9 (2020–2021). This study applied some analyses, including the correlation and the general least squares method. The study results show that the predictive ability of PKP for the IFRS 9 period is higher than the IAS 39 period, which is consistent with the forward-looking ECL model. Furthermore, related to the interaction between standards and incentives, this study found that the predictive power of PKP regarding actual credit losses (KRG) in the IFRS 9 period was higher for banks with high-income levels but lower for large banks. The main limitation is that the study is a short period of IFRS 9 in both countries. The impact of implementing IFRS 9 can help regulators and associations of professional accountants in Indonesia and Thailand consider appropriate strategies to promote the application of IFRS 9. This research empirically observes the marginal impact of implementing IFRS 9 regarding forming loan loss reserves to predict KRG using data from ASEAN countries.

A simple method for joint evaluation of skill in directional forecasts of multiple variables

Forecasts for key macroeconomic variables are almost always made simultaneously by the same organizations, presented together, and used together in policy analyses and decision-makings. It is therefore important to know whether the forecasters are skillful enough to forecast the future values of those variables. Here a method for joint evaluation of skill in directional forecasts of multiple variables is introduced. The method is simple to use and does not rely on complicated assumptions required by the conventional statistical methods for measuring accuracy of directional forecast. The data on GDP growth and inflation forecasts of three organizations from Thailand, namely, the Bank of Thailand, the Fiscal Policy Office, and the Office of the National Economic and Social Development Council as well as the actual data on GDP growth and inflation of Thailand between 2001 and 2021 are employed in order to demonstrate how the method could be used to evaluate the skills of forecasters in practice. The overall results indicate that these three organizations are somewhat skillful in forecasting the direction-of-changes of GDP growth and inflation when no band and a band of ± 1 standard deviation of the forecasted outcome are considered. However, when a band of ± 0.5% of the forecasted outcome is introduced, the skills in forecasting the direction-of-changes of GDP growth and inflation of these three organizations are, at best, little better than intelligent guess work.

Liquidity Risk And Basel III Implementation In Southeast Asia Banking

Purpose: The objective of this study was to determine the effect of liquidity coverage ratio, net stable funding ratio, net interest margin, and cost of funds on return on assets in Southeast Asian countries' banking services. Methodology/approach: This research was a quantitative research method. Secondary data was used and collected from stock exchanges in each country. Samples were banks in Indonesia, Malaysia, Cambodia, Philippines, Singapore and Thailand. The data testing technique uses multiple linear regression analysis. Findings: The study inform that net stable funding ratio, liquidity coverage ratio, net interest margin and cost of funds have a significant effect on return on assets. Practical implications: The practical implications were BASEL III implementation to manage liquidity risk and capital in each country have successfully and encourage compliance with bank liquidity and capital aspects according to the framework of BASEL III to enhance the financial performance of banks in Southeast Asian countries. Originality/value: Research on the application of BASEL III in Southeast Asian Countries as a framework that establishes international standards for bank capital adequacy, stress testing, and liquidity requirements is the originality of this research.

Factors Affecting Commercial Bank’s Net Interest Margin: Study Case in Indonesia, Thailand, and Philippines.

The aim of this research is to investigate determinants factors of Commercial Banks’s net interest margin in Indonesia, Thailand, and Philippines. This study uses quarterly panel data from 2010 until 2020. The OLS Equation Model was used to analyze the macroeconomic factors and banks' specific factors towards Net Interest Margin (NIM). The result showed that inflation rate as the only one factor from Macroeconomic factors and Overheard cost is one from Bank Specific factors which significantly affect Net Interest Margin in all of these countries. Other than that, valuable findings from this research show that determinants factors which have significant impact from bank specific characteristics in each country are different. In Indonesia, Higher Size of operations, Risk Aversion and Income Diversification are determinants factor that can lower net interest margin. Bank in Indonesia have to manage their credit risk well, because this factor can potentially lead to higher NIM. Commercial Banks in Thailand and Philippines show opposite result. Larger size of operations and higher risk aversion will lead to higher NIM. Market concentration plays a critical role to minimize NIM in Philippines. So, regulators should maintain this condition. Because higher competition potentially led to higher NIM in Philippines’s bank.DOI: 10.26905/jkdpv27i2.9598

Thai Commercial Banks on Twitter

Twitter is a social media (SM) platform that rapidly generates electronic word of mouth (e-WOM). Marketer-generated content (MGC) is controllable and could enhance the positive e-WOM. Hence, in this study, the author examined the characteristics of MGC and reactions from followers based on Thai banks' Twitter accounts. The author collected a total of 10,000 tweets from nine banks in Thailand—both high- and low-performing banks. The author conducted research with natural language processing (NLP) to uncover intents using an open application programming interface (API). The author used three data-mining techniques—association, clustering, and classification. The Twitter strategies of banks with high and low performances are quite similar. The sentiment is the intent type that dominates Thai banks' intent strategies. Several intents could be combined to draw e-WOM in terms of favorites (FAV) and retweets (RT). Six intent patterns (clusters) were extracted. Some of these clusters are classifiers for FAV and non-FAV tweets. This study guides the application of data mining in business research and suggests MGC strategies for marketers.

Business intelligence and geographic information systems in the banking industry: A case study of home loan valuation

This case is designed to illustrate how to utilize a business intelligence framework and a geographic information system (GIS) to make better decisions in the banking industry. The case started when Jong, the senior certified analytic professional, and Kampu, the GIS solutions expert were drafting a proposal presentation to help ABC Bank of Thailand improve its home loan appraisal process. The current appraisal process was time-consuming and the appraisal value from the internal and external appraisers were very different as the appraisal process relied heavily on the opinions and judgements from all appraisal staffs. Currently, there was a home loan application pending for Hugo, the appraisal manager of ABC Bank of Thailand, to make the decision on the final appraised value. This was a great opportunity for Jong and Kampu to revisit the current appraisal process and to demonstrate how business intelligence and GIS could aid in the appraisal decision. Additionally, the proposed GIS-based BI dashboard allowed the appraisal team to the analyze data-related to the appraised property in real-time. Eventually, Jong and Kampu had to make a decision on what appraised value Hugo should recommend to the home loan committee members.

The mediator role of knowledge management and innovative capability affecting firm performance among commercial banks in Thailand

Firm performance is the ultimate concern among stakeholders. The research objectives are two-fold—to determine the mediator role of knowledge management and innovative capability in driving performance among commercial banks in Thailand, and to provide recommendations and contributions based on the relevant findings. The sample comprising 600 bank officers from the six biggest commercial banks in Thailand was selected using the multi-stage sampling method. A questionnaire was used as the data collection tool and the data were analyzed via structural equation modeling (SEM). The empirically collected data generates a fit conceptual model (x2/df = 1.179, p = 0.116, GFI = 0.976, AGF = 0.951, CFI = 0.978, NFI = 0.970, and RMSEA = 0.011). In the findings, organizational structure, organizational strategy, intellectual capital, innovative capability, and knowledge management have a direct influence on firm performance (p < 0.05). Knowledge management and innovative capability were found to be mediators in the paths of organizational structure, organizational culture, intellectual capital, and firm performance (p < 0.05).

Analysis of the Implementation of Sharia Compliance on Buddhist Employees in Increasing Sharia Banking Capacity at Islamic Bank

Researchers conducted research on sharia compliance with Buddhist employees who work at the Islamic Bank of Thailand, because the Islamic Bank of Thailand is not limited to religion and race for employees. Islamic Bank of Thailand is currently a state company under the supervision of the Ministry of Finance and the Bank of Thailand. Therefore, in this study to find out whether Buddhist employees know and understand about sharia principles in Islamic banks.The research method used is a qualitative research method, with data collection techniques using data from the study of related documents and data from interviews. Research results that can be the result of interviews and related documents. The presentation of the research results is divided into 3 parts as follows: 1. The work factors of Buddhist employees who work in the Islamic bank of Thailand. 2. Islamic Law Regarding Banking Requirements. 3. Services in the Islamic Bank Of Thailand Service Model. From the results of the three research sections, when analyzed together with interviews and related documents, Buddhist employees who work at the Islamic Bank of Thailand adhere to Islamic principles strictly in accordance with the goals of the institution, provide services in accordance with Islamic principles and are impressed by very Islamic user. In the interview, both the Muslim and non-Muslim population commented that they were satisfied with the Islamic Bank of Thailand's convenient services and fulfilled their need to access the service

Leading Bank Performances under Exntended Caretaker Goverment- Empirical Approach from Thailand

Thailand’s economic performance has historically been determined by the frequency and severity of political de-stability by government collapses mostly organized through army coups. This study investigated the theoretical and empirical literature political uncertainty and economic slowdown arising out of the last coup and caretaker government enforcing the emergency decree to maintain peace and order and the caretaker government being in power until the general elections were held in 2019. This paper scrutinizes the impact of political instability, macroeconomic and bank-specific factors on the performance of leading Thai banks in the context of Thailand. The study selected only two out of top 4 private banks due to the availability of data for the uncertainty period ranging from 2014 to 2018 until elections were held a year later. The study used 8 common measures of bank performance and profitability along with descriptive analyses. Using happiness index as qualitative standpoint and also comparing financial variables with rating agencies prediction, various reports including the Bank of Thailand, the study also presents some new results and a robustness analysis. Our study concludes that political uncertainty was a significant contributor for erratic bank performance.

An analysis of experienced life events on continuance intention to use online banking in Thailand

At present, marketers focus on the phenomenon of changing consumer behavior that influences consumer decision-making. This study aims to analyze the influence of experienced life events (affected by COVID-19), perceived risk, and anxiety on the continuance intention to use online banking in Thailand. The data were attained from 500 customers who had visited commercial banks in Thailand. The data were analyzed through Confirmatory Factor Analysis (CFA) and Structural Equation Modeling (SEM). The findings of the study suggested that both perceived risk and anxiety influenced the continued use of online banking services while experiencing the COVID-19 pandemic. More specifically, anxiety had a direct negative influence on the continuance intention to use online banking services; and the perceived risk had an indirect influence on the Continuance Intention to use online banking services caused by anxiety. From the research results, it is recommended that focus should be on policies and activities that help reduce consumers’ perceived risk and anxiety to motivate more consumers to turn to online banking and eventually into a cashless society with a willingness and sense of safety.

Learning by doing: central bank digital currency in Thailand

Central bank digital currency (CBDC) has gained much attention among central banks, as it could potentially improve efficiency, inclusion and innovation in the financial system. The present paper contains a review of the CBDC journey of the Bank of Thailand (BOT), from the guiding principles, to test results of the CBDC prototypes and challenges going forward. It provides insights with regard to the introduction of CBDC into the economy, as well as how a public institution such as a central bank can go about exploring cutting-edge technologies for use in public policy.

The Effect of Economic, Environmental and Social Dimension Disclosure in Sustainability Report on Earnings Response Coefficient. Study of Banks in Indonesia, Malaysia and Thailand

This study aims to determine whether disclosure of the economic, environmental and social dimension in sustainability reporting by the company affects the earnings response coefficient. The research was conducted on the banking sector company listed in Indonesia, Malaysia and Thailand with the research period of 2020. The sampling technique is using the purposive sampling method with the total of 62 companies. The analysis techniques used in this study are descriptive analysis techniques and data regression by using EViews 12. The result shows a different effect between economic, environmental and social dimension disclosure on sustainability reports towards the earnings response coefficient in each country. In Indonesia, the economic, environmental and social disclosure has a significant effect on the earnings response coefficient. While only the economic dimension has a significant influence on the earnings response coefficient in companies listed in Malaysia and Thailand. This could be done by looking at the economic behaviour, especially in investing in each country.

The influences of Experienced Life Events (Project from governmental) Focused on Anxiety and Perceived Risk toward the Continuance Intention to Use Online Banking of customers

At present, market researchers realize importance of experienced life events affecting consumers' behavior. The experienced life events are influenced by things around each consumer leading to different behavior (Elder, 1998 ;Moschis, 2007), which can positively and negatively affect experience life events (Drake, Sheffield, & Shingler, 2011). However, essential experienced life events may play a role in consumers' behavior leading to the increasing number of online banking service users in Thailand. Positive life events may play a crucial role in the consumers' behavior to increasingly use online banking services such as projects of the government (Half-half Co-payment Scheme). There were 23.94 million users with total spending of 62,966.6 million Baht. 33.2 million. For Wewin Project (Roa Chana), 33.2 persons were eligible, and total spending was 266,612 million (Bangkok Biz, 2022). However, Thailand just started developing to be a cashless society with swift good change. Online banking service is an innovative financial technology that changes ways of living and behaviors of consumers to access banks more quickly and conveniently. However, according to the previous studies regarding consumers' behavior, a number of people found the online banking service impractical, and the key obstacle was that the consumers were anxious and scared, and perceived risks and unsafety that may happen from such kind of service (Plainbangyang, Siriwat, 2018 ;Panyalimpanun, Thitipol, 2017) Perceived risks and anxiety are contrary to current phenomenon. Statistically, the number of online banking users in past 5 years in Thailand from June 2017- June 2021, tremendously increased from 45,167,588 accounts to 110,839,744 accounts (Bank of Thailand, 2021). Such phenomenon happened during crucial experienced life events which may affect intention of using online banking services of the consumers apart from anxiety and fear from online banking services. Keywords: Perceived risk, Anxiety, Online Banking, Experience Life Events.

Risk spillover of banking across regions: Evidence from the belt and road countries

We present the risk spillover effect of 2178 banks in 63 countries along the Belt and Road from 2006 to 2020 with the VAR-BEKK-GARCH model. We find that Chinese banking has two-way risk contagion with banks in East Asia and Association of Southeast Asian Nations, South Asia, West Asia, and Central Asia. Furthermore, Chinese banking keeps a positive correlation with banks in Thailand, Turkey, and Saudi Arabia, and its relationship with Indonesia and Kazakhstan shows seasonal characteristics, whereas with India, there is no obvious spillover effect.

The Role of the Financial Regulator of Thailand in Ensuring the Information Security of the Financial and Banking Sector

The object of the study is the relations arising during the functioning of the national legal mechanism for ensuring cybersecurity. The subject of the study is presented by regulatory legal acts and sources of "soft law" of Thailand, which establish requirements for information systems of the financial and banking sector. Using the example of the second economy in Southeast Asia - Thailand, the role of the financial regulator of the state – the Bank of Thailand (Bank of Thailand, BOT) in ensuring cybersecurity of the financial and banking sectors is described. The features of the legal status of the Bank of Thailand, determining the coordinating role in the institutional mechanism for ensuring cybersecurity, are highlighted. The key documents of the financial regulator that form the regulatory mechanism for ensuring cybersecurity in Thailand are examined. The powers of the financial regulator of Thailand are distributed among three bodies. The Bank of Thailand controls commercial banks, financial companies, credit institutions, asset management companies, electronic payment services and credit card companies. The Securities and Exchange Commission oversees securities transactions, while the Insurance Commission oversees the activities of insurance companies. Ensuring information security is entrusted to the Bank of Thailand, which is authorized to create a risk management system for financial institutions in order to ensure their stability. To this end, it adopts regulations that establish security standards for three types of information systems: general, serving electronic payments and serving electronic payment cards. Noteworthy is the requirement for information system operators, when concluding a service agreement, to determine the rights of internal and external auditors, as well as an official of the Bank of Thailand to verify transactions and control the service provider. The financial regulator determines the status of service providers of particularly important payment systems, charging them with the obligation to develop security measures for information systems, depending on the types and complexity of their own services.

Operational Risk Management And Performance Of Cooperative Microfinance In Thailand

Purpose of the study: This study aims to examine the operational risk management (ORM) impact on cooperative microfinance performance by identifying specialization as a moderator with respect to the relationship between ORM and cooperative microfinance performance. Methodology: The survey questionnaires were distributed to 455 respondents, all of whom were senior officers of saving and credit cooperative microfinance service providers (MSPs) in Thailand, using a quantitative technique. The data analysis was performed employing SmartPLS software version 3.0 and the Structural Equation Modeling (SEM) method. Main Findings: The result indicates that cooperative microfinance performance is significantly affected. Here, specialization moderates the relationship between ORM and cooperative microfinance performance. Research limitations/implications: The survey used a cross-sectional design by only examining credit and saving cooperative MSPs. It employed a quantitative method and relied on a single mode of data collection. The implication of this study will be important for policymakers like the Bank of Thailand and the Ministry of Finance in Thailand when it comes to developing microfinance policies and programs. Novelty/Originality of this study: This study is unique in that it examines the impact of ORM on cooperative microfinance performance and recognizes specialization as a moderator.

Central bank digital currency: Applications for domestic and cross-border transactions in Thailand

With the belief that Distributed Ledger Technology (DLT) holds the promise of bringing greater efficiency, inclusion and innovation to the financial system, the Bank of Thailand (BOT) began research and development of a proof-of-concept central bank digital currency (CBDC) utilising DLT for wholesale domestic and cross-border funds transfers, beginning with Project Inthanon in 2018. A proof-of-concept corporate CBDC was also subsequently developed, and the exploration of a retail CBDC for the general public is currently under way. In this paper, we discuss the important findings and considerations of each CBDC project. We found that DLT can increase efficiency in both domestic payment systems as well as cross-border transactions by enabling direct transfers between parties and providing enhanced programmability through the use of smart contracts. Several technical shortcomings still exist and will need to be reevaluated. Furthermore, studies on governance structure, regulatory issues and implications of CBDC for monetary policy, financial stability and the future financial landscape must be carried out before proceeding to develop production-ready systems and networks.