Krungsri Securities (KSS) holds a slightly negative view on the bank and consumer finance sectors in light of the recent flooding in Bangkok, citing risks to asset quality in terms of increased credit costs and higher non-performing loans.
The firm’s preliminary estimate suggests that for every 0.05% increase in credit costs, the net profit forecast for 2027 for the bank and consumer finance sectors would decline by 2.1% and 0.9%, respectively. Nevertheless, financial institutions are expected to roll out relief measures for borrowers, potentially mitigating the impact on asset quality.
Heavy and continuous rainfall in Bangkok and the surrounding areas from September 24 to 27, 2026, has led to widespread flooding in many districts. This situation is contributing to concerns over the financial health of borrowers, particularly in the affected regions.
Some banks have already introduced measures to assist borrowers, including debt repayment holidays, reductions in installment amounts and interest rates, as well as offering additional loans at special interest rates. Krungsri anticipates that further relief measures will be rolled out by other financial institutions in due course.
Despite the challenging outlook, Krungsri maintains a ‘Bullish’ stance on the bank sector, with KBANK (target price: THB 300) and KTB (target price: THB 55) as the top picks, while keeping a ‘Neutral’ rating on the consumer finance sector, with KTC (target price: THB 54) as a favorable stock.
