Krungsri Securities (KSS) anticipates that seven major Thai banks—Bangkok Bank (SET: BBL), Kasikornbank (SET: KBANK), Krungthai Bank (SET: KTB), Siam Commercial Bank (SET: SCB), TMBThanachart Bank (SET: TTB), Kiatnakin Phatra Bank (SET: KKP), and TISCO Financial Group (SET: TISCO)—will collectively post a combined net profit of THB 58 billion for the third quarter of 2025. This figure implies an increase of 6% year-on-year and 3% quarter-on-quarter.
The brokerage firm attributes this earnings growth mainly to a substantial rise in non-interest income (Non-NII), which is expected to jump 42% year-on-year and 20% quarter-on-quarter. The surge is driven primarily by higher Fair Value Through Profit or Loss (FVTPL) gains at KTB, following the bank’s investment activity in Thai Airways International (SET: THAI).
Krungsri maintains a ‘Value Play’ investment theme for the banking sector, noting that Thai banks continue to offer attractive dividend yields—estimated between 6% and 9% annually. For 2025, the firm highlights asset quality management, including credit costs and non-performing loans (NPLs), as pivotal topics to monitor.
Nevertheless, KSS believes banks can keep these metrics under control at the current stage. The analyst continues to name KTB and SCB as its top picks for the sector.
Krungsri projects the sector’s net interest margin (NIM) to dip to 2.77% in 3Q25, down from 3.16% in 3Q24 and 2.88% in 2Q25. The decline is attributed to policy rate cuts in April and August 2025, expansion of lending to lower-risk segments, and efforts to reduce interest burdens for borrowers under government support programs.
The total loan portfolio is forecast to contract 1.6% quarter-on-quarter, equivalent to a 2.4% drop year-to-date, as all major loan categories have shown declines.
Expected credit loss (ECL) is likely to rise 3% year-on-year and quarter-on-quarter due to additional management overlays and lingering uncertainties in the economic recovery. As a result, the NPL ratio is projected to increase slightly to 3.80% from 3.75% in the previous quarter.
For the full year, Krungsri Securities expects Thai banks to record a combined net profit of THB 210 billion in 2025—representing a 2% year-on-year decrease. The decline is attributed largely to softer net interest income due to a narrower NIM. Meanwhile, loan growth is set to contract by 0.4% year-on-year as banks tighten lending standards and focus on quality borrowers.
