Thailand’s 11 listed commercial banks reported combined net profit of roughly Baht 66,245 million for the second quarter of 2026, as the sector’s earnings diverged sharply along a “K-shaped” pattern of winners and losers.
While net interest income across the board came under sustained pressure from successive policy rate cuts—the Bank of Thailand’s benchmark rate fell to 1.00% in February—banks with strong fee-based and wealth management franchises, including KTB, KBANK, TTB and KKP, posted double-digit profit growth, offsetting shrinking margins with gains in wealth management, bancassurance, and capital markets income. By contrast, SCB and BBL saw earnings fall by double digits as net interest margins compressed and provisioning stayed elevated.
Across the industry, asset quality held broadly stable, with non-performing loan ratios mostly steady or improving and capital adequacy ratios comfortably above regulatory minimums, underscoring that Thai banks’ resilience this quarter came less from lending growth than from disciplined cost control and diversification into non-interest income.
| Unit: THB m | 2Q26 | % yoy | % qoq | Bloomberg consensus forecast in 2Q26F | % diff from BBG forecast |
|---|---|---|---|---|---|
| BBL | 9,498 | -19.8% | -13.6% | 10,714 | -11.4% |
| KBANK | 13,247 | 6.1% | -9.7% | 12,653 | 4.7% |
| SCB | 11,117 | -13.1% | 9.0% | 10,614 | 4.7% |
| KTB | 12,125 | 9.0% | -2.5% | 11,212 | 8.1% |
| TTB | 5,508 | 10.1% | 6.5% | 5,163 | 6.7% |
| KKP | 2,122 | 50.6% | 8.5% | 1,814 | 17.0% |
| TISCO | 1,764 | 7.3% | 1.7% | 1,762 | 0.1% |
| CREDIT | 989 | 6.9% | -15.1% | 1,080 | -9.2% |
| SECTOR | 56,370 | -1.5% | -3.3% | 55,012 |
In a comment from CGSI, eight leading Thai banks under its coverage posted a combined net profit of THB56.4 billion in 2Q26, marking a 1.5% year-on-year (YoY) and 3.3% quarter-on-quarter (QoQ) decline. The sector’s pre-provision operating profit (PPOP) also slipped, down 2.9% YoY and 2.2% QoQ, impacted by narrowing net interest margins and increased expenses.
Loan growth remained positive at 1.9% YoY, 1.2% QoQ, and 2.5% from end-2025. Notably, the non-performing loan (NPL) ratio dropped to 3.59% from 3.63% in the previous quarter, with absolute NPLs down 1.8% YoY but flat QoQ. Credit cost edged slightly lower to 134 basis points (bp) from 138bp in 1Q26.
Net interest margin sat at 2.88%, down 39bp YoY and flat QoQ. Non-interest income rose strongly by 13.6% YoY and 0.7% QoQ, driven by higher brokerage, asset management, dividend, and financial instrument gains. However, the sector’s cost-to-income ratio increased to 43.4% in 2Q26 from 41.9% in the preceding quarter.
With declining net profit, banks’ return on equity (ROE) fell to 9.1%, down from 9.3% in 1Q26. Kiatnakin Phatra Bank (KKP) led earnings outperformance thanks to robust fee and loan growth, while Krungthai Bank (KTB) also beat estimates on lower credit costs. Conversely, Bangkok Bank (BBL) had the highest earnings miss, falling 11.4% short of consensus due to higher expenses and sluggish non-interest income.
Following results, CGSI downgraded Tisco and KKP to “Reduce” and SCB to “Hold” due to recent share price rallies and earnings forecast adjustments. The sector now trades at 0.93x 2026F price-to-book value, above its 5-year average, and offers a 5.4-5.6% dividend yield for FY26F-27F—a less appealing level than in early 2025. CGSI suggests investors consider reducing bank sector exposure.
