Thailand's Big Three Banks Adopt Cautious Growth Strategy Amid Economic Uncertainty

 

 

KBank, SCB X and Krungsri prioritise asset quality over aggressive lending as domestic recovery remains sluggish and geopolitical tensions persist.

 

Thailand's three largest commercial banks have unveiled conservative business targets for 2025, signalling a marked shift towards cautious growth amid mounting economic uncertainties and elevated risk levels across multiple fronts.

 

Kasikornbank (KBank), SCB X and Bank of Ayudhya (Krungsri) have all adopted a "careful growth" strategy, prioritising asset quality and risk management over aggressive expansion as the Thai financial sector navigates a challenging landscape marked by global economic pressures, geopolitical tensions and tepid external demand.

 

The subdued outlook comes as Thailand's domestic economic recovery continues at a gradual pace, with banks opting to focus on sustainable growth built on solid foundations rather than pursuing market share gains.

 

 

KBank targets modest loan growth

Kattiya Indaravijaya, chief executive of Kasikornbank, said the bank has set loan growth targets of 0–2 per cent for 2025, aligned with broader economic growth expectations and emphasising quality lending, secured loans and customers with strong long-term growth potential.

 

The bank expects its net interest margin (NIM) to range between 2.75 and 2.95 per cent, reflecting interest rate trends and loan portfolio structure. Net fee and service income is projected to grow in the mid-to-high single digits, driven by wealth management solutions and the bank's leadership in domestic and cross-border payment services.
 

 

 

 

 

Cost control remains a priority, with KBank targeting a cost-to-income ratio in the mid-40s to offset revenue growth challenges. The bank aims to keep its non-performing loan (NPL) ratio below 3.25 per cent and credit cost between 140–160 basis points, reflecting prudent risk management amid economic uncertainty.

 

KBank will continue its customer-centric strategy across retail, SME and corporate segments, designing tailored financial solutions whilst leveraging data and AI to enhance lending efficiency, expand fee income and improve digital experiences through its K PLUS and K BIZ platforms under a "Digital First Experience" approach.

 

 

 

SCB X eyes balanced growth

SCB X has set loan growth targets in the low-to-mid single digits, reflecting a cautious stance amid domestic economic headwinds. Growth will be driven primarily by large corporate clients, maintaining market share in residential mortgages through Siam Commercial Bank, and support from Gen 2 businesses.

 

The group expects NIM of 3.0–3.2 per cent, whilst net fee income is projected to grow in the mid-to-high single digits, supported by wealth management, a recovery in bancassurance and contributions from Gen 2 ventures.

 

However, investments in virtual banking will increase costs, pushing the cost-to-income ratio to the low-to-mid 40s range, though disciplined expense management remains a key priority.
 

Credit cost is expected to range between 1.35–1.55 per cent, reflecting proactive risk management and robust collection strategies to navigate economic volatility and mitigate portfolio quality risks.

 

 

 

Krungsri maintains selective lending

Bank of Ayudhya has set total loan growth targets of 2–4 per cent for 2025, emphasising quality lending. NIM is targeted at 4.0–4.3 per cent, with non-interest income expected to grow in the mid-single digits.

 

The bank aims for a cost-to-income ratio in the mid-40s, consistent with operational efficiency improvements. Its NPL ratio target is 3.25–3.50 per cent, with loan loss coverage of 120–135 per cent.

 

Credit cost has been set at 200–230 basis points, reflecting caution regarding loan portfolio quality amid ongoing economic uncertainty.

 

The conservative positioning across Thailand's major banks underscores the sector's recognition that 2025 will require careful navigation rather than aggressive expansion, with stability and asset quality taking precedence over growth targets.