From April 16, 2026, onwards, listed companies in the Thai commercial banking sector will start to gradually announce their first-quarter 2026 results, led by Tisco Financial Group Public Company Limited (SET: TISCO) as the first to do so. For this quarter, it is expected that the sector’s profits may not be robust, likely declining year-on-year.
Q1/2026 Profit Over 50 Billion Baht
According to analysis by CGS International Securities (Thailand) or CGSI, the estimated net profit for Q1 is around 51.9 billion baht, a 12.5% decrease from the same period last year but a 6.4% increase from the previous quarter. Non-interest income is expected to support overall profits, while the loan loss provision rate tends to increase.
Pre-provision operating profit (PPOP) is expected at 112.6 billion baht, a 6.3% decrease from last year, but a 9.2% increase from the previous quarter. The growth rate for total loans is expected to drop by -1.1% year-on-year and -0.3% quarter-on-quarter.
Additionally, net interest margin (NIM) is likely to decline to 2.91%, or -45 basis points from the previous year, and -14 basis points from the prior quarter, pressured by the policy rate cut to 1.0% in Q1 this year from 2.0% in Q1 last year.
Based on monthly loan data at the end of February 2026 for the banking group (eight banks: BBL, KBANK, SCB, KTB, TTB, TISCO, KKP, and CREDIT), total loans decreased 1.6% year-on-year, but rose 0.5% month-on-month and slid 0.5% since year-end 2025.
All banks reported positive loan growth month-on-month, but year-to-date growth remains negative, led by BAY (-3.2%), TTB (-2.2%), and KBANK (-1.3%), due to repayments in credit card and personal loan segments.
Meanwhile, CREDIT, KKP, and KTB had positive loan growth at 2.3%, 2.0%, and 1.6%, respectively. CREDIT is expected to post the sector’s highest loan growth, driven by demand from small SMEs and micro SMEs. KTB’s loan growth was from lending to government and state enterprises.
Nonetheless, non-interest income is expected to increase by 13.3% and 9.6% year-on-year and quarter-on-quarter, respectively, supported by fee income from securities brokerage and transactions, as well as investment gains and financial instruments, resulting from exchange rate volatility and crude oil price fluctuations.
CGSI analysts forecast that the banking group’s loan loss provision rate will increase by 8 basis points year-on-year and 16 basis points quarter-on-quarter to 150 basis points in Q1 this year, since banks remain cautious in lending due to heightened geopolitical risks, impacting the Thai economy in Q1-Q2 2026.
Moreover, there is no clear signal as to when tensions in the Middle East will ease. Thus, banks are expected to set aside expected credit loss (ECL) provisions in the form of management overlays in H1/2026.
Banking Sector Outlook
CGSI analysts maintain a Neutral investment weight for Thai banks, expecting low net profit growth in 2026-2027, offset by a 5.7% dividend yield in 2026.
Currently, Thai banks are trading at a 12-month forward P/BV of 0.77x, above the 5-year historical average of 0.66x.
SCB and KTB are selected as top picks, expected to deliver 5.0-8.0% annual dividend yields in 2026-2028.
In Q1 2026, Thai commercial banks posted a collective net profit of around 51.9-57.0 billion baht, down 12.5% year-on-year due to NIM pressure and higher provisions, but banking stocks remain attractive due to consistently high dividend payouts.
