Thai Banking Titans Warn of ‘Era of Exhaustion’ Amid Low-Growth Outlook
Thailand’s leading banks warn of a "challenging" 2026, pivoting towards debt quality and climate resilience as GDP growth is projected to stall below 2%
- Thailand's three largest banks are warning of an "era of exhaustion" for 2026, driven by a sluggish economy with projected GDP growth of less than 2%.
- In response to the low-growth outlook, the banks are shifting their strategy from aggressive expansion to prioritizing stringent asset quality, debt management, and risk reduction.
- The economic challenges are compounded by high household debt, geopolitical instability, and the emerging financial risks of climate change, which is now considered a "New Norm" in risk assessment.
Thailand’s leading banks warn of a "challenging" 2026, pivoting towards debt quality and climate resilience as GDP growth is projected to stall below 2%.
The leadership of Thailand’s three largest commercial banks have issued a unified warning for 2026, describing the upcoming financial year as a period of "all-around exhaustion."
Faced with a sluggish economy and a projected GDP growth of less than 2%, the "Big Three" have signalled a strategic shift away from aggressive expansion in favour of stringent asset quality management and climate risk mitigation.
Bangkok Bank: Navigating the 2% Ceiling
Chartsiri Sophonpanich, president of Bangkok Bank, noted that the economic environment remains restrictive. With growth forecasts hovering around the 2% mark, traditional economic transactions are expected to remain stagnant.
"The role of the bank in this context is to work hand-in-hand with our clients to help them adapt to a shifting landscape," Chartsiri stated.
He emphasised that while the bank remains ready to support lending across large corporate and retail sectors, the primary focus for 2026 will be "debt quality, risk reduction, and prudent cost control."
He further noted that the recent interest rate cuts by the Bank of Thailand may offer some reprieve for debt-laden entrepreneurs.
SCB: The ‘Dual Mandate’ Challenge
Kris Chantanotoke, CEO of Siam Commercial Bank (SCB), took a more global view, describing 2026 as a year of "multi-directional challenges."
He cited international trade wars, geopolitical instability in neighbouring regions, and Thailand’s own structural inefficiencies as primary hurdles.
Domestically, the shadow of record-high household debt continues to loom over the recovery.
"It is an unavoidable 'Dual Mandate,'" Kris explained. "We must pursue growth and maintain asset quality simultaneously. We are streamlining internal structures to ensure our Non-Performing Loan (NPL) ratios do not escalate beyond current levels."
SCB’s strategy involves "selective growth," prioritising low-cost producers and industry leaders who demonstrate high financial discipline.
Krungthai Bank: Climate Change as the ‘New Norm’
Payong Srivanich, president of Krungthai Bank, offered the most sobering outlook, with growth estimates as low as 1.5% to 1.8%.
He warned that the banking sector cannot operate in a vacuum, divorced from the reality of the broader economy.
Beyond liquidity concerns and public debt, Payong identified natural disasters as a critical "New Norm" for financial risk.
"Climate change and the resulting floods are changing our annual risk assessment standards," he remarked.
He called for a national dialogue on whether Thailand’s economic structure possesses the resources—including insurance frameworks and tax-funded welfare—to protect vulnerable groups from these emerging environmental threats.
As Thailand enters 2026, the banking sector is no longer measuring success through volume alone. The consensus among the "Big Three" suggests a defensive posture: protecting the existing customer base, leveraging international networks for SME survival, and bracing for the systemic impact of a warming planet.
