On Jan 14, JP Morgan upgraded United Overseas Bank (UOB) and Thai Military Bank (TMB); and retained an overweight on DBS Group Holdings. Here’s why. Thailand’s banks have been battling asset quality problems for the last seven years, according to JP Morgan analyst Harsh Modi.

Although 2019 was a tough year because of the ongoing trade war, tourism — a major contributor to Thai GDP of up to 12% — took a dive as well.

“Because of the seven-year period of building up provisions and write-offs, loan loss coverage buffers are high,” Modi says, indicating that risk aversion among Thai banks are likely to be very high following several years of asset problems.

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