Citing data and analysis from Fitch Ratings, Thailand’s credit outlook could potentially be upgraded to ‘Stable’ from the current ‘Negative’ during the annual review in September 2026, reflecting improvements in the country’s political and economic landscapes and making the assessment more closely aligned with Moody’s Ratings and S&P Global Ratings, both of which revised their outlooks earlier in 2026.
Fitch’s earlier view noted that Thailand’s risks had decreased compared to the previous year, citing greater political stability and better economic resilience, offering a positive signal ahead of the country’s annual credit review. On September 24, 2025, Fitch had revised Thailand’s credit outlook to ‘Negative’ while maintaining the rating at BBB+, amid political uncertainties and rising debt burdens.
Following this downgrade, Fitch also changed the outlook of five Thai banks to ‘Negative’ from ‘Stable,’ namely Export-Import Bank of Thailand (EXIM BANK), Krungthai Bank (KTB), TMBThanachart Bank (TTB), Standard Chartered Bank (Thai) (SCBT), and United Overseas Bank (Thai) (UOBT).
DAOL Securities (Thailand) expects that any improvement in Thailand’s outlook would likely result in a subsequent upgrade for Thai banks, with KTB and TTB standing to benefit the most. Such a move would likely boost investor confidence and support share prices.
DAOL maintains an ‘Overweight’ rating on the banking sector, noting that the down cycle for interest rates has ended and that Thai banking stocks offer an average dividend yield of around 6%, higher than the market average of approximately 3%. Banks are also trading at attractive valuations, with a P/BV of 0.98x—below their ten-year historical average by about 0.25 standard deviations.
DAOL’s top sector picks are KTB (‘Buy’, target price THB 50.00) and KBANK (‘Buy’, target price THB 270), while maintaining a ‘Hold’ rating on TTB (target price THB 3.20). KTB and TTB are seen as the primary beneficiaries of an improved sovereign outlook, which could further lift confidence in the Thai banking sector.
KTB Aims for Steady Loan Growth
KTB CEO Payong Srivanich stated the bank expects slight loan growth above the 0–2% target for 2026, focusing on sustainable and consistent expansion. KTB remains cautious in balance sheet management to maintain strong financial health and double-digit returns on equity. The bank’s capital—especially Tier 1—remains robust.
Large corporates drive loan growth, with retail lending continuing to expand, while KTB supports SMEs to mitigate economic challenges. KTB is also preparing to support new-generation entrepreneurs, adapting business structures for future growth and transforming strategies to create new growth drivers in the evolving economic environment.
The bank will focus on efficient overseas business expansion rather than large investments or acquisitions, aiming to link capabilities and networks for Thai clients investing abroad and foreign clients in Thailand.
TTB Maintains Tight Credit Controls
TTB CEO Piti Tantakasem said Thai banks must prioritize asset quality and household debt management. TTB actively manages non-performing loans through sales and write-offs to maintain asset quality, though risk costs remain high. Cautious lending continues, particularly in the oversupplied real estate sector and among speculative retail borrowers.
TTB supports the development of data governance initiatives like Consent Data Exchange, which would improve credit access and reduce system risks by identifying potential customers and screening fraudulent applicants.
Mr. Piti described Thailand’s economy as ‘K-shaped,’ with high-growth sectors such as electric vehicles having limited domestic supply chain benefits, while the broader base—especially SMEs and the labor force—faces challenges from reduced employment and sluggish orders. He stressed the need for Thailand to ‘Reinvent’ itself by nurturing new industries that can drive inclusive growth and sustainably benefit the economy and labor force.
Resolving economic challenges requires transformation in the real sector, not just from financial institutions or the Bank of Thailand. Sustainable improvement depends on broad-based, inclusive growth, not just headline GDP expansion.
The Thai economy is therefore entering an important reform period, requiring both public and private sector collaboration to develop sustainable new industries, strengthen domestic supply chains, and deliver economic benefits broadly across the population.
