Analysts warn of war's impact on sector

Thai banks risk realising negative impacts from the US-Israeli military strikes on Iran, especially if oil prices remain above US$100 per barrel, potentially forcing them to set aside extra provisions or expected credit losses for management overlay from the conflicts, say analysts.

- NAREERAT WIRIYAPONG

The banking sector could initially be affected by rising living costs for borrowers, which would reduce debt repayment capacity, resulting in higher provisioning expenses than estimated, said Chayaporn Tocharoen, banking analyst at Krungsri Securities.

Weerapat Wonk-Urai, an analyst at CGS International Securities Group, said if the conflict between Iran and the US-Israel alliance ends within one month, there will be no impact on the Thai banking sector.