KBANK recorded third-quarter 2026 net profit of THB12.7 billion, meeting forecasts from CGS International Securities (Thailand) and the Bloomberg consensus despite declines from both comparison periods. CGSI retained its Add recommendation and THB253 target price for 2026, while projecting a further sequential earnings decline in the fourth quarter due to seasonal expenses.
Profit fell 2.2% year-on-year and 4.0% quarter-on-quarter. For the first nine months, however, earnings increased 3.4% to THB40.6 billion, representing 78% of CGS’s full-year forecast—a proportion the brokerage considered consistent with its expectations.
Large corporate lending supported loan growth of 6.3% year-on-year. The loan book expanded 0.3% from the previous quarter and 3.6% from the end of 2025.
Asset quality showed little sequential change. The non-performing loan ratio stood at 3.51%, with the absolute NPL balance unchanged from the second quarter. Stage 2, or underperforming, loans increased 0.7% over the same period.
Provisioning remained prudent, according to CGSI. Credit costs edged up to 161 basis points from 160 basis points, while NPL coverage improved to 173% from 166%. Capital adequacy also strengthened, reaching 19.1% against 18.5% in the second quarter. The improvement primarily reflected an increase in the Tier 2 capital ratio to 2.9% from 2.0%.
Pre-provision operating profit declined 1.9% year-on-year and 4.2% quarter-on-quarter. Net interest margin held at 2.94% sequentially, as both earning-asset yields and funding costs remained unchanged. Non-interest income increased 6.3% from a year earlier but fell 12.3% from the second quarter, reflecting lower gains on financial instruments measured at fair value through profit or loss.
Net fee income followed a similar pattern, rising 5.3% year-on-year but declining 5.5% sequentially. CGSI attributed the quarterly reduction mainly to transaction service fees affected by Bank of Thailand regulations that took effect on July 1, 2026.
Lower marketing and maintenance spending helped reduce non-interest expenses by 5.1% year-on-year and 4.1% quarter-on-quarter. The cost-to-income ratio nevertheless edged up to 41.8% from 41.7%.
CGSI noted on margin pressure and softer financial-instrument gains as earnings constraints, balanced by stable quarterly asset quality and disciplined operating expenses. The brokerage expects seasonal spending to weigh on fourth-quarter profit.
