Tisco Financial Group Public Company Limited (SET: TISCO) posted a net profit of THB 1.76 billion for 2Q26, rising 7% year-on-year and 2% quarter-on-quarter, aligning closely with expectations from Kiatnakin Phatra Securities (KKPS) and market consensus. The profit growth was largely attributed to declining provisions, as credit costs normalized to 1.1% compared to 1.3% in the previous quarter.
Pre-provision operating profit (PPOP) increased 5% YoY on robust fee income but slipped 7% QoQ. The group’s first half earnings represented 50% of KKPS’ full-year forecast and 51% of consensus projections, leading the analysts to maintain their current earnings estimates.
As TISCO maintained its interim and final dividend payouts at THB 2 and THB 5.75 respectively, the analyst sees limited potential for further upside and has reiterated its “Underperform” rating for the stock, with a target price of THB 112.
Lending yields declined slightly, down 1 basis point QoQ and 17 bps YoY, reflecting an absence of exceptional front-end fees and a higher allocation to lower-yielding new car hire purchase (HP) loans. Nonetheless, a steeper drop in funding costs supported net interest margin (NIM) expansion to 5.1%, up from 5% in 1Q26 and 4.9% in 2Q25. Management, however, anticipates that the benefit from falling funding costs will diminish, while the analyst expects little room for further NIM or net spread expansion in the second half of 2026.
Loan growth remained modest, with overall loans up 0.3% QoQ and flat year-to-date. Retail lending posted slight gains, up 0.5% QoQ and 0.7% YTD, bolstered by an increase in auto HP loans, now 44.5% of the portfolio versus 43.6% in 2025, and stronger floor plan financing, which jumped 7%. However, these gains were tempered by ongoing corporate loan repayments and cautious growth in auto cash loans due to asset quality concerns.
Net fee income dipped 3% QoQ due to seasonality and the absence of large prepayment fees, yet YoY growth stood at a robust 16%, supported by increased bancassurance and asset management fees. Operating expenses rose in tandem with revenue (+6% YoY, +5% QoQ), partly due to seasonal influences, pushing the cost-to-income ratio up from 43% in 1Q26 though stable YoY.
