Fitch Ratings warns Thai banks’ bad loans to rise to 3.7% in 2025 amid weak economy

Fitch Ratings has warned that the asset quality of Thai banks remains “fragile,” projecting a slight rise in non-performing loans (NPLs) this year as the economy continues to struggle. The agency expects the impaired-loan ratio to increase from 3.4% in 2024 to 3.7% in 2025, remaining at that level in 2026.

The ratings firm said the main pressure is concentrated among small and medium-sized enterprises (SMEs), whose impaired-loan ratio stood at 7.9% in the first half of 2025, up from 7.2% at the end of 2024.

Fitch also noted that Thailand’s economic growth remains subdued, forecasting GDP growth of 2.2% in 2025 and 1.9% in 2026, compared with 2.5% in 2024.

However, low unemployment and falling interest rates should help support borrowers’ repayment capacity. Fitch added that Thai banks have reduced high-risk lending and maintained sufficient buffers to write off impaired loans.

In September, Fitch revised the outlook of five Thai banks to “Negative,” following the downgrade of the Thai government’s credit outlook. The affected institutions include:

• Export–Import Bank of Thailand (EXIM)
• Krungthai Bank (KTB)
• TMBThanachart Bank (TTB)
• Standard Chartered Bank (Thai) (SCBT)
• United Overseas Bank (Thai) (UOBT)

eanwhile, Fitch affirmed the long-term foreign-currency issuer default ratings of other Thai banks, citing their stable standalone financial strength. These include:

• Bangkok Bank (BBL)
• Bank of Ayudhya (BAY)
• Kasikornbank (KBank)
• Siam Commercial Bank (SCB)
• SCB X (SCBX)