Thailand’s Tourism Slump and Household Debt Weigh on Its Lenders

Thailand’s banks are grappling with weak lending amid high household debt, slowing tourism and sluggish consumer spending that risk dampening their outlook for the rest of the year.

The banks are facing lackluster earnings tied to lower net interest margins — the difference between interest income and paid interest — and muted loan growth as the country endures economic uncertainties, according to a note from Citi Research.

Thailand’s export and tourism reliant economy has expanded at an average of under 2% over the past decade, trailing other major Southeast Asian economies. Gross domestic product will likely grow 1.3% to 2.3% ...