Kiatnakin Phatra Securities (KKPS) stated in a research note that Kasikornbank Public Company Limited (SET: KBANK) has reported a solid start to 2026, with core net profit (excluding a one-off investment compensation of THB 1.46 billion) reaching THB 13.4 billion—a 30% increase quarter-on-quarter and a slight 3% decrease year-on-year. The improvement was largely driven by a surge in mutual fund fee income.
Asset quality trends surpassed expectations, as KBANK saw decreases in non-performing loans (NPLs), Stage 2 balances, and loan inflows since the previous quarter. This positive development is attributed to cautious lending practices and ongoing contraction in SME lending. The bank’s coverage ratio stands at 161%, well above its comfort level, indicating that further provisioning requirements are minimal. As a result, KKPS has reduced its 2026 credit cost assumption to 1.6% from 1.65%.
Fee income saw a robust increase of 18% YoY and 5% QoQ, particularly fueled by strong mutual fund fees in the first two months of the year. KKPS has raised its 2026 fee growth forecast to 12% (from 9%), supported by ongoing wealth product penetration and improving investment sentiment.
Operational efficiency continues to be a key focus, with cost discipline expected to drive further improvements, notably through personnel optimization and stricter control over discretionary spending. The bank is targeting a full-year cost-to-income (C/I) ratio of 42%, compared to 39% in the first quarter.
Reflecting these developments, KKPS has raised its 2026 earnings forecast for KBANK by 11%, and by 6% per annum for 2027-28, citing stronger fee income, lower provisions, and effective cost management. Normalized earnings are expected to decline 3% in 2026 before rebounding with 3% growth in 2027.
KKPS maintains its dividend per share forecast at THB 14 and raises its target price to THB 243 per share (from THB 240), reiterating a “Buy” recommendation on the back of KBANK’s attractive valuation and a prospective yield of 8%.
