OREANDA-NEWS. Thailand's four large commercial banks will be able to sustain their franchise strengths, despite the country's muted economic expansion, leading to above-average financial performances underpinning their credit ratings, says Fitch Ratings in its latest Thai bank peer review.

Thailand's economic downtrend is negatively affecting performance across the country's banking sector, and Fitch maintains a negative sector outlook, posing downside risks to asset quality. Fitch believes the four large Thai banks - Bangkok Bank Public Company Limited, Kasikornbank Public Company Limited, Krung Thai Bank Public Company Limited and Siam Commercial Bank Public Company Limited - are better-positioned to cope compared with other banks in the sector, due largely to their high capital and reserve coverage buffers and sound underlying profitability.

Thai corporates have been investing and expanding in higher-growth regional markets, and the large Thai banks are increasingly following their corporate clients. Fitch expects the neighbouring countries to be a strategic focus and expansion opportunity for the large banks - although contribution to profit will remain limited in the medium-term.