Krungsri Maintains ‘Neutral’ Stance on Thai Banking Sector, Emphasizes Prudent Lending amid Economic Recovery

published 2 d ago · en · source ↗

Affected tickers

Per-ticker News Sentiment Indicator

KBANKother · positive · med
KBANK led the banking sector with a 1.6% month-on-month loan growth in April 2026, driven by strong corporate lending performance.
KTBother · positive · med
Krungsri Securities identified KTB as a top pick in the banking sector, noting its 0.2% month-on-month loan growth and 2.7% year-to-date expansion.
KKPother · positive · med
Kiatnakin Phatra Bank (KKP) posted a 1% month-on-month loan growth in April 2026, supported by both corporate and SME lending.
SCBother · neutral · high
SCB showed modest monthly loan growth of 0.1% and leads the sector with 3.5% year-to-date growth, but the analyst maintains a neutral stance on the banking sector.
BBLother · neutral · high
Bangkok Bank (BBL) reported a 0.8% month-on-month loan growth, but Krungsri maintains a neutral stance on the banking sector due to prudent lending amid economic uncertainty.
TTBother · neutral · high
Krungsri maintains a 'Neutral' rating on the banking sector, noting that TTB's loan growth was modest at 0.2% month-on-month despite a 2.1% decline year-to-date.
TISCOother · negative · med
TISCO was the only institution to experience a contraction in loans, with a decline of 0.3% month-on-month and 0.7% year-to-date.

Article body

Krungsri Securities (KSS) expresses a slightly positive view on the April 2026 loan growth figures reported by the Thai commercial banking sector, with an overall increase of 0.6% month-on-month, primarily driven by growth in corporate lending. However, loans to the government sector, small and medium-sized enterprises (SMEs), and retail clients experienced declines during the same period. Most banks reported loan growth for the month, with Kasikornbank (KBANK) leading the sector with a 1.6% month-on-month increase, propelled by strong corporate lending. This was followed by Kiatnakin Phatra Bank (KKP), which posted 1% growth, supported by both corporate and SME lending. Bangkok Bank (BBL) reported a 0.8% increase, mainly from expectations for business loan expansion. Krung Thai Bank (KTB) and TMBThanachart Bank (TTB) both demonstrated 0.2% loan growth, also attributed to business lending. SCB X (SCB) saw a modest rise of 0.1%, due to corporate loans as well. Meanwhile, TISCO Financial Group (TISCO) was the only institution to experience a contraction, with loans declining by 0.3% month-on-month. Since the beginning of 2026, the sector’s total loans have increased by 1.8%. SCB has shown the most impressive year-to-date growth at 3.5%, followed by BBL at 3%, KTB at 2.7%, KKP at 2.4%, and KBANK at 0.3%. Conversely, TISCO saw a decrease of 0.7% year-to-date, and TTB declined by 2.1%. Liquidity in April 2026 remained positive, with total deposits in the commercial banking sector increasing by 1.8% month-on-month. Compared to the end of the previous year, deposits have grown by 3% so far. The loan-to-deposit (L/D) ratio for April 2026 stood at 81.8%, down from 82.7% in March 2026. Krungsri notes that commercial banks continue to be prudent in their lending, focusing on high-quality loans due to uncertainty surrounding the pace of economic recovery and persistent concerns around non-performing loans (NPLs). As a result, the brokerage maintains a ‘Neutral’ rating on the banking sector. Looking ahead to the remainder of 2026, the firm expects key profit-supporting factors to include: 1) effective management of expenses—encompassing financial costs, operational expenditures (OPEX), and credit costs, and 2) continued growth in fee and service income, particularly from wealth management. Banks’ ability to manage asset quality risks remains in a controllable range, as reflected in the continuously rising coverage ratio, which reached 204% in the first quarter of 2026. Following these, Krungsri maintains its top pick recommendations for the sector, naming KBANK and KTB as preferred stocks, assigning ‘Buy’ ratings, with target prices of THB 232.00 per share and THB 38.00 per share, respectively.