Banking Stocks Rally as BOT Meeting Hints at Rate Hikes

Banking stocks rallied on Thursday after Thailand’s Central Bank voted 4 to 3 to keep the policy interest rate at a record low of 0.5 percent during its June meeting, in line with market consensus, despite mounting inflationary pressures.


As of 12.00 hrs. local time in Thailand, the share price of Bangkok Bank Pcl. (SET: BBL) was at THB135.00/share, up THB7.50/share or 5.88 percent, with a trading value of THB2,992 million. 

The share price of Kasikornbank Pcl. (SET: KBANK) was at THB150.50/share, up THB6.00/share or 4.15 percent, with a trading value of THB3,704 million. 

The share price of SCB X Pcl. (SET: SCB) was at THB113.00/share, up THB4.00/share or 3.67 percent, with a trading value of THB2,218 million. 

The share price of Krung Thai Bank Pcl. (SET: KTB) was at THB15.90/share, up THB0.50/share or 3.25 percent, with a trading value of THB1,133 million. 

The share price of TMBThanachart Bank Pcl. (SET: TTB) was at THB1.27/share, up THB0.04/share or 3.25 percent, with a trading value of THB796 million. 


The Monetary Policy Committee on Wednesday voted 4 to 3 to keep the benchmark rate at its lowest level, while the minority voted to raise the rate by 0.25 percentage points.

The meeting result was in line with the projections of all 20 economists surveyed by Refinitiv, despite Thailand’s inflation reaching a 13-year high in May as living expenses continued to rise. According to a Reuters poll, Bank of Thailand is anticipated to maintain the rate at 0.50 percent in 2022, before increasing it by 0.25 basis points (BPS) in the first quarter of 2023 and another 0.25 BPS in the second quarter.

Piti Disyatat, the secretary of the MPC, stated that the Committee’s assessment is that the Thai economy continues to recover and is more likely to accelerate than anticipated on the back of improving domestic demand and tourism.

The Committee believes that inflation will continue to go up and will remain at high levels longer than expected as a result of the increase in oil prices.

As inflationary pressures endanger public spending, the Committee has signaled an exit to the present easy monetary policy and a possible rate hike in the near future.

Bank of Thailand also increased its economic growth forecast for 2022 from 3.2 percent to 3.3 percent.


KTBST Securities rates the banking sector as “Overweight” despite the Bank of Thailand’s decision to keep the key interest rate at 0.50 percent. However, with rising inflationary pressures, KTBST anticipates the Monetary Policy Committee would raise the rate sooner than predicted. 

KTBST anticipates that the Central Bank will hike the official interest rate by 0.25 percentage points at the end of 2022 and then again by 0.25 percentage points in 2023 to combat inflation before it escalates.

KBANK has been selected as a Top Pick stock in the banking sector, with a target price of THB190.00, as the Bank is transitioning into an all-inclusive digital bank and loans to tourist-related businesses are showing signs of recovery following Thailand’s reopening to international tourists.