Thai Bank Profits Hold Steady in Q3, Driven by Investment Gains
Thai bank profits are forecast to be broadly flat for Q3 2025, but brokers advise investors to focus on high-yield dividend payers like Krungthai, SCB, and Kasikornbank, despite challenging economic headwinds
- Thai commercial bank profits for Q3 2025 are projected to be largely flat year-on-year.
- This stability is attributed to gains from investment portfolios and reduced loan loss provisions, which have offset lower interest income.
- Krungthai Bank (KTB) is a notable performer, benefiting from a significant extraordinary gain on its investment in Thai Airways shares.
Thailand’s commercial banking sector is expected to report broadly flat net profits for the third quarter of 2025 (Q3 2025) compared to the previous year, according to a consensus of financial analysts.
The sector has faced headwinds from lower interest income, but this pressure has been effectively countered by reduced loan loss provisioning and gains from investment portfolios.
Krungthai Bank (KTB) is tipped to be the top performer of the quarter, primarily due to booking a significant extraordinary gain from its strategic investment in the shares of Thai Airways (THAI).
Natapon Khamthakrue, Assistant Managing Director of Investment Analysis at Yuanta Securities (Thailand), estimated the banking group’s combined net profit for Q3 2025 will be approximately 55.3 billion baht.
While this figure is flat year-on-year, it marks a slight drop of 1.8% from the previous quarter.
“The results are pressured by lower interest income but are partly offset by reduced provisioning and an improved recovery in fee income,” Natapon told Thansettakij.
He identified KTB as the standout performer, followed by Kasikornbank (KBANK), while Bangkok Bank (BBL) and TISCO are among those expected to report slower growth.
Yuanta maintains a 'Neutral' rating on the sector, arguing that despite slower operating trends, major banks are raising their Dividend Payout Ratios to offer shareholders attractive returns. KBANK is named a Top Pick with a fair price assessment of 190 baht.
2026 Outlook Remains Challenging
Watan Jitsomnuk, director of Strategy Analysis at PI Securities, echoed the cautious view, stating that core business activity has yet to recover due to a sluggish economy and tighter criteria for new loan issuance.
PI Securities forecasts the combined net profit for nine major banks in Q3 2025 at 59.6 billion baht, a modest 3.5% growth year-on-year.
However, Watan warned that the fourth quarter is likely to be the lowest for profit in the entire 2025 financial year.
Looking ahead, the research teams project that 2026 will be challenging, with the banking sector facing economic uncertainty compounded by potential political instability from the general re-election scheduled for the first half of the year. PI Securities forecasts combined net profit will actually decline by 1.8% in 2026.
Despite the challenging growth outlook, the sector’s current valuation—trading at a discount to its 10-year average—and its consistently high dividend yield are seen as mitigating factors against sharp stock price falls.
Both firms maintain a 'Neutral' stance on the sector. PI Securities recommends KTB and SCB as top picks, citing an expected high dividend yield of over 6% in 2025 and robust balance sheets. For smaller banks, they favour KKP, recommending to 'Buy on Weakness' due to an anticipated 6.9% dividend yield in 2026.
