Thai Banks Navigate 2025 Turbulence with Strategic Pivot to Fee Income

 

 

Sector demonstrates resilience as wealth management and insurance offset pressure on lending margins amid economic uncertainty.

 

 

Thailand's major commercial banks demonstrated notable resilience in 2025, navigating a challenging economic landscape marked by a global economic slowdown, policy rate cuts, and weak domestic demand. 

 

The sector confronted significant pressure on core lending operations as persistently negative headline inflation and elevated household debt dampened consumer and investor sentiment throughout the year.

 

Despite these headwinds, the banking sector revealed divergent performance narratives that underscored successful strategic adaptation. 

 

Full-year results showed net profits ranging from 5.9 billion baht to 49.6 billion baht across the six major institutions, with year-on-year changes spanning from a modest 1.9% decline to sector-leading growth of 17.5%. 

 

The high-growth stories belonged to smaller, more agile players who executed strategies centred on non-interest income and operational efficiency, whilst larger incumbents focused on maintaining scale and profitability amidst universal pressure.

 

The most successful banks pivoted decisively towards fee-based revenue streams, with strong growth in wealth management, insurance services, brokerage fees, and investment gains effectively compensating for weakness in core lending income. 

 

This strategic shift was accompanied by unwavering focus on prudent risk management, evidenced by stable or improving non-performing loan ratios and high coverage levels across the sector. 

 

 

 

Disciplined cost control emerged as another critical differentiator, with several banks pointing to operational efficiency gains as vital levers for preserving profitability in an environment of constrained revenue growth.

 

SCBX emerged as one of the strongest performers, posting 8.1% profit growth to reach 47.5 billion baht despite an 8% decline in net interest income. 

 

The group's success stemmed from higher investment gains, robust wealth management fees, and a 4.7% reduction in operating expenses, which improved its cost-to-income ratio to 40.5%.

 

Chief Executive Arthid Nanthawithaya emphasised the bank's focus on structural transformation: "SCBX focused on strengthening its core foundations, prudently managing credit quality amid volatility, alongside key structural adjustments to support our long-term vision of becoming Thailand's leading financial technology group."

 

Bangkok Bank recorded modest 1.8% profit growth to 46 billion baht, distinguishing itself through exceptionally prudent management.

 

The bank maintained an industry-leading non-performing loan coverage ratio of 324.1% and a robust capital adequacy ratio of 21.8%, reflecting its commitment to financial stability whilst diversifying revenue through gains on financial instruments.

 

Kasikornbank retained its position as the sector's most profitable institution with 49.6 billion baht in net profit, remaining virtually flat year-on-year.

 

A 7.33% decline in net interest income was almost entirely offset by a 14.75% surge in non-interest income, with insurance services and wealth management delivering outstanding performance that compensated for lending pressures.
 

 

 

TMBThanachart Bank reported a stable performance with net profit of 20.6 billion baht, down just 1.9%.

 

Chief Executive Piti Tanchakasem stated the results met targets across four key areas: "maintaining performance, stabilising asset quality, creating shareholder value, and assisting customers with debt."

 

The bank maintained strong asset quality with a 2.87% NPL ratio and 152% coverage.

 

Krungsri achieved solid 6.9% profit growth to 31.7 billion baht, supported by a significant one-time gain from its TIDLOR Holdings investment and healthy non-interest income growth.

 

President Kenichi Yamato noted: "Krungsri remained steadfast in executing our strategic priorities, with continued emphasis on asset-liability management efficacy, enhancing operational efficiency, and maintaining a prudent approach to risk management."

 

Kiatnakin Phatra Bank delivered sector-leading growth of 17.5%, reaching 5.9 billion baht in net profit.

 

This impressive result came despite a 13.1% decline in net interest income, as the bank deliberately slowed lending to focus on asset quality whilst driving an 18.2% increase in non-interest income through its securities brokerage, wealth management, and digital investment platforms.

 

Krungthai Bank delivered a 2025 net profit of 48,229 million baht, up 4.5%, driven by robust growth in wealth management and disciplined cost management that improved its cost-to-income ratio to 40.3%.

 

President Payong Srivanich emphasized that the bank remains focused on "sustainable, quality growth" by maintaining a high coverage ratio of 203.6% and a prudent NPL ratio of 2.90%, while actively supporting customers through structural economic challenges and investing in digital innovation to transition toward a "Beyond Banking" future.

 

The sector-wide strategic realignment towards diversified revenue streams, combined with robust capital positions and high provisioning levels, positions Thailand's banking sector to weather continued economic uncertainty whilst capitalising on future opportunities from a foundation of financial strength.