Leading financial analysts have shared their insights following SCB’s robust second-quarter 2025 earnings, which saw the bank exceed market expectations. Commentary from DBS, CLSA, and Morgan Stanley highlights various aspects of SCB’s performance, from strong non-interest income to effective cost control and management’s commitment to high dividend payouts despite prevailing macro uncertainties.
DBS
DBS has upgraded SCB to “BUY” and a higher target price of THB 135. The broker noted that it’s “not too late to ride the upside.”
SCB’s 2Q25 earnings came in at THB 12.8 billion, marking a significant increase of 27.7% year-on-year and a 2.3% rise quarter-on-quarter. This performance beat expectations by a notable 18%, primarily due to stronger-than-expected non-interest income. DBS also emphasized that improved asset quality and effective cost control were key contributors to the bank’s bottom line. Looking ahead, the broker forecasts a dividend per share (DPS) of THB 11.10 for FY25, implying an attractive dividend yield of 9.2%.
CLSA
CLSA has maintained its “OUTPERFORM” rating on SCB, with a target price of THB 130. The firm noted that SCB’s 2Q25 earnings “beat market expectation.”
During a recent analyst briefing, SCB X’s management disclosed that THB 900 million in overlays were added during the quarter. This proactive move was made amid “ongoing uncertainty on US tariff outcomes.” Despite the challenging outlook, management reiterated their goal of achieving double-digit Return on Equity (ROE) by 2027. This ambition supports a high dividend payout ratio of 80%, which is likely to be sustained in the near term.
Morgan Stanley
Morgan Stanley (MS) has assigned an “Equalweight” rating to SCB, with a target price of THB 126. The firm noted that SCB delivered an “in-line 2Q” performance and is “maintaining 2025 guidance.”
MS’ analysis highlighted that revenue was in line, despite a softer Net Interest Income (NII). The Net Interest Margin (NIM) contracted by 8 basis points quarter-on-quarter, primarily due to lower interest rates. There is now a risk that full-year NIM could fall below 3.6%—with MS’ estimate at 3.53%.
Regarding other income streams, fees were soft, though supported by wealth management services. Mark-to-Market (MTM) gains at SCB10X helped offset the decline in fee income. The cost-to-income ratio (CIR) for the quarter was 40%, below MS’ 2025 estimate of 41%.
On the provisioning front, provisions were “ahead” of expectations, largely due to a THB 900 million management overlay (MO). Credit cost stood at 164 basis points, remaining within SCB’s target range of 150–170 basis points. However, Morgan Stanley noted a deterioration in auto loan quality.
SCB’s 2025 targets remain unchanged, and management has stated that loan growth (down 2% year-on-year) is not a priority in the current macroeconomic environment. The bank affirmed that sufficient MO will be maintained to keep credit costs within target, with cost control identified as a key operational focus.
Overall, Morgan Stanley believes SCB delivered a “good 2Q result” despite ongoing macro uncertainties. Management remains confident in sustaining an 80% dividend payout ratio.
