CGS International Securities (Thailand) (CGSI) has released an analysis following its recent ‘CGSI Regional Financial Conference,’ which brought together executives from Kasikornbank (KBANK), Tisco Financial Group (TISCO), Thai Credit Bank (CREDIT), and Krungthai Card (KTC) to discuss current economic conditions, the impact of floods in southern Thailand, and business outlooks for 2026.
KBANK did not disclose specific lending data for the nine flood-affected provinces in the south, but noted that these provinces account for 2.6% of Thailand’s GDP in 2025. The Bank of Thailand (BoT) estimates the disaster will shave only 0.1-0.2% off 2026 GDP growth. Meanwhile, KBANK stated that it is offering assistance to flood-impacted customers in line with BoT guidelines.
TISCO stated that loans to the southern region represent 3-4% of its total loan portfolio as of 3Q25, with the share from flood-impacted areas set to decrease further. This suggests only a minor effect on asset quality and loan-loss provision ratios. However, the company remains cautious for 2026 due to projected subdued GDP growth and lingering household debt vulnerabilities. TISCO is slowing the expansion of high-yield loan products and tightening credit standards across all lending segments.
CREDIT anticipates loan growth of 10-15% in 2026, even with stricter lending criteria. Key drivers for this growth are expected to be micro-SME loans, home-backed loans, and unsecured personal loans. CREDIT stands out from other commercial banks by focusing on individual entrepreneurs rather than extending credit to large businesses or SME clients.
KTC indicated that its 2026 targets will be lower than those of 2025, as the company prioritizes prudent lending standards for all credit segments amid what it sees as continued challenging macroeconomic and market conditions for unsecured lenders.
Following these, CGSI maintains a ‘Neutral’ stance on the banking sector. However, despite a lack of short-term catalysts, dividend yields remain attractive, with the sector trading at a forward P/BV of 0.7 times for 2026—slightly above the five-year average of 0.64 times. The brokerage firm names SCB and KBANK as top picks due to expected high dividend yields of 5.5-9.5% per year in 2026-27.
Downside risks for the sector include rising non-performing loans and further policy rate cuts from the BoT, according to CGSI. On the upside, a rebound in international tourist arrivals, more favorable U.S. tariff policy, and government infrastructure projects could all serve as positive catalysts for the sector.
