Banking shares rose on Friday after the four biggest lenders all reported second-quarter profit that beat market estimates, as a decision to waive fees for digital transactions had a milder impact than analysts expected.
The Stock Exchange of Thailand's banking index ended morning trade up 2%, helped by a 4% surge in the share price of the country's third-biggest lender by assets, Kasikornbank.
Earlier in the day, Kasikornbank reported a 21% rise in April-June profit versus the same period a year prior, helped by 4% growth in income earned from interest charged on loans. It said growth in non-interest income slowed to 1.7% due to the waiver; analysts were expecting a bigger hit.
The big four banks from April 1 waived fees on interbank transactions, bill payments and cash withdrawals to firm up competitiveness as technology firms expand into money-related services such as online payment and electronic wallets.
The move supports the government's goal of turning the country into a cashless society.
The fourth largest lender, Krung Thai Bank, also reported earnings on Friday morning. It booked growth for the first time in four quarters with a 140% profit rise versus a year prior when it was hit with steep impairment costs.
Net interest income at the state-controlled bank fell 4.8% but net income from fees and services rose 1.3%.
Krungthai Bank's stock was up 0.6% at midday.
Digital push
Banks' offensive against technology upstarts has involved partnerships and hefty investment in digital services. Kasikornbank has 8.4 million people signed up to its internet banking service, and in June, said its customers could make digital payments through Facebook Messenger.
Second-ranked Siam Commercial Bank, which has tie-ups with Line Corp and Alphabet Inc's Google, on Thursday said it aims to have 10 million digital users by the end of 2018 from 7 million at present.
The lender reported a 6.7 decline in profit after market close on Thursday, citing expenses in digital technology, and said non-interest income -- pulled down by the fee waiver -- fell 6.2%. The result nevertheless beat analyst estimates, and its shares were up 3.6% by midday on Friday.
Bangkok Bank, the biggest lender, also reported earnings late on Thursday, saying profit rose 14.3%. It said non-interest income soared 19.1% due to a rise in fee income from bancassurance and mutual funds.
"The domestic economy started to show more visible signs of recovery with solid growth in both private consumption and private investment," the bank said in a statement.
Bangkok Bank's shares were up 1.8% on Friday.