Thai Banks in Focus Amid Economic Slowdown

As Thailand’s economy shows signs of slowing, the banking sector is one to watch for its resilience and profit potential. 

In 2024, commercial banks reported solid earnings to the Stock Exchange of Thailand (SET), and early Q1 2025 results suggest continued strength.

Bangkok Bank (BBL) led the pack, reporting a Q1/2025 net profit of THB12.6 billion, up 19.9% YoY. The increase was driven by higher operating income, particularly net interest income of THB31.9 billion and a net interest margin of 2.89%. Non-interest income also rose, fueled by strong fee-based services and gains from investments.

Despite signs of a domestic economic slowdown—due to weaker private investment, global trade policy uncertainty, and soft internal demand—services and tourism sectors remain supportive, with non-Chinese tourist arrivals continuing to grow.

BBL acknowledges rising challenges, including geopolitical tensions, volatile energy prices, and high household debt, which could impact consumer purchasing power and investor confidence. The bank maintains a cautious business stance, emphasising responsible lending, financial stability, and sustainable growth.

As of March 2025, BBL’s total loans reached THB2.72 trillion (+1.0% YTD), mainly from large corporate clients. The NPL ratio was manageable at 3.0%, with a high coverage ratio of 300.3%. Deposits rose 1.8% to THB3.23 trillion, keeping the loan-to-deposit ratio at 84.4%. Capital ratios remain strong, well above regulatory requirements.

TISCO Financial Group reported a net profit of THB1.643 billion for Q1/2025, a 5.2% year-on-year decline, reflecting ongoing economic fragility. Despite the dip in earnings, TISCO maintained a strong financial position. 

Both the Group and TISCO Bank received credit rating upgrades from TRIS Rating to “A” and “A+,” respectively.

Sakchai Peechapat, Group CEO, noted that Thailand’s economy in Q1/2025 faced mounting challenges from prolonged trade tensions, recent earthquakes that rattled consumer confidence, and new risks such as retaliatory tax measures from the US starting in April. He expects economic growth for the year to remain subdued at around 1.5–2%, largely dependent on the outcome of trade negotiations and their ripple effects in the region.

CIMB Thai Bank Public Company Limited reported a net profit of THB 838.1 million for the first quarter of 2025, marking a 33.9% increase year-on-year. The strong performance reflects effective cost management and robust growth in fee-based income.

Total operating income reached THB 3,583.8 million, up 2.2% from the same period last year. Net fee and service income rose sharply by 20.7%, offsetting a 5.1% decline in net interest income.

The bank also improved operational efficiency, with its cost-to-income ratio dropping to 47.6% from 62.5% in Q1/2024. This highlights better cost control and continued improvements in operational performance.

TMBThanachart Bank Public Company Limited (ttb) announced a net profit of THB 5,096 million for the first quarter of 2025. This strong performance was driven by effective cost management. Asset quality remained on target, with a low non-performing loan (NPL) ratio of 2.75%, reflecting quality loan growth, proactive NPL management, and close customer engagement through its “Khun Soo, Rao Chuay” (You Fight, We Help) debt relief program.

Krungthai Bank reported a net profit of THB 11,714 million for the first quarter of 2025, reflecting quality growth. The performance supports S&P Global’s recent rating upgrade to “BBB”. The bank continues to focus on asset quality, customer debt restructuring, and sustainable financial adaptation.

Bank of Ayudhya PCL (Krungsri) and its subsidiaries reported a net profit of THB 7.53 billion for Q1/2025, a 20% increase from the previous quarter. The growth was driven by a strategic focus on quality loan expansion in recovering sectors, effective cost control, and improved operational efficiency.

Large corporate lending rose 4.7% despite economic headwinds, while SME and retail loans declined amid rising uncertainties. The bank maintained asset quality through comprehensive customer support measures, including its "You Fight, We Help" program.

Key financial highlights:

NIM rose to 4.1% on lower funding costs.

Non-interest income increased 5.4% YoY.

Cost-to-income ratio improved to 45.7%.

NPL ratio stood at 3.29%, with a healthy coverage ratio of 124.5%.

CET1 capital ratio was strong at 14.91%.

As of March 31, 2025, Krungsri reported total loans of THB 1.9 trillion, deposits of THB 1.84 trillion, and total assets of THB 2.63 trillion, reinforcing its position as Thailand’s fifth-largest financial group and a designated D-SIB.

CEO Kenichi Yamato highlighted the bank’s targeted growth strategy in recovering industries, while warning that rising global uncertainties—including US tariff measures, high household debt, and structural weaknesses—pose challenges to Thailand’s economic outlook for the remainder of the year.

All eyes now turn to two major banks, KBANK and SCB, which are set to report earnings on Monday, April 21.