Thai Banks' Q3 Profits Diverge Amid Margin Squeeze as Fee Income Offsets

 

Six lenders offset weaker interest income with wealth and insurance fees and tight cost control, while bolstering reserves against flood risks.

 

Thailand's six listed banks reported mixed third-quarter results this week. Falling interest rates squeezed lending income, and the lenders relied on fee income, cost discipline and prudent provisioning to protect earnings.

 

Combined nine-month net profit across Bangkok Bank, Kasikornbank (KBank), SCB X (SCBX), Krungsri, TMBThanachart (ttb) and Kiatnakin Phatra (KKP) came to about 150.8bn baht, according to the banks' disclosures.

 

This total is our own tally, and reporting bases differ between banks.

 

Three banks reported higher profits year on year, led by KKP. Bangkok Bank and SCBX reported declines, and ttb did not give a comparison.

 

 

A lopsided recovery

The banks described an uneven economy. Exports, particularly electronics tied to the global artificial intelligence (AI) cycle, and large corporates remain strong.

 

Households and small businesses are under pressure from high debt and living costs, and tourism is recovering more slowly than expected. Flooding late in the quarter added to the strain, while limited government finances constrain further stimulus.

 

Lenders cut rates to ease customers' burdens, which hit net interest income. Most banks grew loans selectively, favouring large corporate, digital and overseas lending over domestic SME and retail segments.

 

All six reported capital ratios comfortably above regulatory minimums. Several set aside extra "management overlay" provisions against flood damage and economic uncertainty.

 

 

Bangkok Bank

Bangkok Bank earned 29.98bn baht in the first nine months, down from a year earlier. It cited lower net interest income after rate reductions and weaker investment gains. Net interest margin was 2.47 per cent. Fees rose on bancassurance, mutual funds and securities business.

 

Operating expenses fell 4.6 per cent, putting the cost-to-income ratio at 48.2 per cent, and expected credit losses fell 13.9 per cent. Loans rose 3.2 per cent from the end of 2025 to 2.69 trillion baht on large corporate and international lending.

 

Deposits rose 0.8 per cent to 3.22 trillion baht. The bad-loan ratio was 3.2 per cent, but coverage was 322.1 per cent, the highest among the six. The capital adequacy ratio was 21.5 per cent.

 

The bank described itself as a "trusted partner and reliable close friend" to customers. It backs the government's SMEs Credit Boost programme and says it will continue responsible lending. Its release did not name an executive.

 

Kasikornbank

KBank's third-quarter profit was 12.72bn baht, down 2.1 per cent year on year and 3.98 per cent from the previous quarter. Market volatility cut financial-instrument income, and net fees fell 5.29 per cent on market conditions and new fee-collection rules.

 

Nine-month profit rose 3.43 per cent to 40.64bn baht, helped by a one-off 1.46bn baht investment compensation. Excluding that item, profit was 39.31bn baht, close to last year's level.

 

Net interest income fell 8.87 per cent to 94.99bn baht, with a margin of 2.89 per cent. Non-interest income jumped 21.51 per cent to 51.89bn baht on wealth management, fund management and insurance.

 

 

The cost-to-income ratio was 40.79 per cent. Provisions of 30.17bn baht put credit cost at 1.60 per cent, the top of its 1.40–1.60 per cent target range. Coverage rose to 177.9 per cent.

 

Chief executive Khattiya Indaravijaya said the recovery remained "K-shaped", with government measures offering only partial support in the final quarter given budget limits. She warned that household purchasing power is fragile and that energy prices remain elevated because of Middle East uncertainty. The bank expects operating expenses to rise seasonally in the fourth quarter.

 

SCB X

SCBX reported a third-quarter profit of 10.68bn baht, down 4.0 per cent quarter on quarter. Rising bond yields caused mark-to-market losses on debt holdings, leaving investment and trading income at a 424 million baht loss.

 

Nine-month profit was 31.99bn baht, down 14.3 per cent year on year. Core operations held up better. Net interest income edged up 0.5 per cent to 27.45bn baht, with net interest margin rising to 3.07 per cent.

 

Fee and other income rose 6.2 per cent year on year to 11.50bn baht, and nine-month growth of 12.8 per cent has already exceeded the full-year target. Operating costs fell 6.3 per cent year on year on AI and automation.

 

SCB Bank's bad-loan ratio improved for a sixth straight quarter to 2.95 per cent, though the group ratio edged up to 3.21 per cent on a planned portfolio adjustment at AutoX. Credit cost fell to 1.37 per cent, coverage was 159.4 per cent and the capital ratio was 18.5 per cent.

 

Chief executive Arthid Nanthawithaya said volatility had become "an enduring feature of the operating environment". He pointed to three priorities: quality growth, non-interest income and proactive asset-quality management.

 

The group is preparing to launch a virtual bank and is helping indebted customers through its "Khun Su, Rao Chuay" scheme. Arak Sutivong takes over as chief executive on 1 January 2027.

 

Krungsri

Krungsri's nine-month profit rose 3.9 per cent to 25.57bn baht, supported by corporate and ASEAN lending, the consolidation of consumer lender TIDLOR and lower funding costs. Its net interest margin improved to 4.58 per cent from 4.28 per cent, the highest of the six banks.

 

Loans rose 0.8 per cent to 1.94 trillion baht. Corporate and ASEAN portfolios grew 6.5 and 7.7 per cent respectively, offsetting declines in SME and domestic retail lending.

 

Deposits fell 1.7 per cent as the bank cut costly time deposits. Non-interest income rose 3.7 per cent and the cost-to-income ratio improved to 45.6 per cent.

 

The bad-loan ratio eased to 3.19 per cent, with coverage of 143.1 per cent, the lowest of the six, and credit cost of 231 basis points.

 

Chief executive Kenichi Yamato said Krungsri delivered "resilient performance" in a challenging backdrop. He expects a gradual recovery supported by private investment and technology exports and forecasts Thai GDP growth of 2.1 per cent for 2026.

 

TMBThanachart

ttb earned 5.46bn baht in the third quarter and 16.14bn baht in nine months. Nine-month operating income rose 3.3 per cent to 50.86bn baht, and pre-provision profit was flat at 27.52bn baht.

 

Nine-month operating expenses rose 7.2 per cent, but the cost-to-income ratio stayed on target at 46 per cent. Loans were 1.187 trillion baht, up 0.3 per cent on the quarter but down 1.5 per cent year to date.

 

Deposits rose 1.0 per cent year to date to 1.282 trillion baht. Provisions totalled 12.11bn baht for nine months, down 5.8 per cent. The bad-loan ratio fell to 2.88 per cent and coverage rose to 159 per cent from 152 per cent at the end of 2025. Capital adequacy was 18.8 per cent.

 

Chief executive Piti Tantakasem said results were in line with targets. The bank launched its "Tang Luk" flood-relief programme, running to 31 December, which it expects to cover under 1 per cent of loans.

 

It is building a wealth business with DBS Bank, Schroders and Webull and has 14 billion baht left in its share buyback. More than 86,200 customers have joined its debt-consolidation programme, which the bank says cuts interest costs by about 3.4 billiomn baht.

 

Kiatnakin Phatra

KKP was the standout performer. Third-quarter profit rose 43.0 per cent year on year to 2.39bn baht and nine-month profit climbed 56.1 per cent to 6.47bn baht.

 

Non-interest income rose 40.2 per cent over nine months, driven by wealth management, the Dime! investment platform, fund fees, investment banking and insurance brokerage.

 

Its securities arm retains the top share of brokerage trading. Net interest income rose 6.5 per cent in the quarter. Loans grew 3.7 per cent year to date. The bad-loan ratio fell to 3.4 per cent from 4.3 per cent at the end of 2025, and coverage rose to 154.7 per cent. Its release did not include a chief executive statement.

 

The banks' earnings drivers are shifting from lending margins to fees and wealth management. Cost control, helped by AI adoption, is a common theme.

 

Asset quality is stable and buffers are thick, but the banks flag the same risks: flood damage, stretched households and global volatility.

 

Executives expect the final quarter to be cautious, with rising seasonal costs at KBank and continued relief programmes at ttb and SCBX.