Krungsri Securities (KSS) forecasts a surge in third-quarter net profit for Krung Thai Bank Public Company Limited (SET: KTB), expecting it to reach THB 16.7 billion—an increase of 50% year-on-year and quarter-on-quarter.
This strong performance is attributed to a sharp rise in non-interest income, which is projected to jump 142% from a year earlier and 94% from the previous quarter, primarily driven by gains under Fair Value Through Profit or Loss (FVTPL), particularly related to its holdings in Thai Airways International Public Company Limited (SET: THAI).
The analyst also highlighted several key business factors:
- The bank’s net interest margin (NIM) is anticipated at 2.75% in 3Q25, down from 3.36% in 3Q24 and 2.90% in 2Q25. The decline is attributed to lower loan yields, following policy rate reductions in April and August 2025 alongside an evolving loan portfolio mix.
- Total loans are expected to decrease by 1.7% quarter-on-quarter and 2.6% from the beginning of the year, mainly due to a reduction in government sector lending.
- Operating expenses (OPEX) are set to rise by 5% year-on-year and 7% from the previous quarter, driven by higher personnel and IT-related costs.
- Expected credit loss (ECL) is projected to increase by 28% year-on-year and 29% quarter-on-quarter, reflecting additional special reserves.
- Asset quality is anticipated to improve, with the non-performing loan (NPL) ratio falling to 2.85% from 2.94% in 2Q25, following the reclassification of THAI loans as performing.
From an investment perspective, Krungsri maintains a ‘Buy’ rating for KTB, with a target price of THB 28 per share. The firm expects KTB will sustain an attractive dividend yield of 7% and sees the bank as having low asset quality risk, given its largely low-risk loan portfolio. In addition, KTB benefits from Thai Airways’ re-listing on the SET Index, which supports both asset quality and earnings potential.
