JPMorgan maintains its “Overweight” rating on Krung Thai Bank (KTB) with a target price of Bt31, following the release of the bank’s fourth quarter and full year 2025 earnings results. The investment bank notes that while trading and tax-related factors led to a slight earnings miss, KTB remains attractive due to its strong dividend payout potential.
KTB reported a net profit of Bt10.8 billion for Q4 2025, down 26% quarter-on-quarte, coming in 11% below JPMorgan’s estimates. For the full year 2025, net profit reached Bt48.2 billion, representing a 10% increase year-on-year but still 3% short of forecasts.
The quarterly net interest income (NII) fell 3% quarter-on-quarter, impacted by an 11 basis point net interest margin (NIM) compression following policy rate cuts and the current and savings account (CASA) ratio at 79%. Loan growth was strong at 7% quarter-on-quarter, primarily driven by a 20% increase in government loans.
Non-interest income (Non-II) was the principal drag on performance, dropping 61% quarter-on-quarter as bond yields rose sharply. Fee income, mainly from wealth management, was positive, increasing by 5% quarter-on-quarter.
Cost management was disciplined, with expenses rising only 1% quarter-on-quarter and a cost-to-income ratio (CIR) steady at 41%. Asset quality was in line with the forecast—NPL ratio fell 16 basis points to 3.3%—though JPMorgan continues to monitor elevated new non-performing loan formation.
Credit costs were in line at 106 basis points, while coverage ratio stood high at 201%.
Although the fourth quarter performance was mixed, JPMorgan believes the recent sell-off in Bangkok Bank (BBL) shares has already priced in some of the sector’s disappointment. The key driver for KTB’s stock has been its dividend payout over the past year, with this trend expected to persist.
JPMorgan recommends adding KTB shares on weakness—particularly relative to its Thai banking peers.
