Thai Banking Stocks Recover as Broker Sees Potential Rerating and Strong Growth Outlook

On Thursday at 11:14 AM (Bangkok time), the share price of SCB X Public Company Limited (SET: SCB ) rose by 0.66% or THB 1.00 to THB 152.00, with a trading value of THB 1.22 billion. Kasikornbank Public Company Limited (SET: KBANK ) advanced by 1.29% or THB 3.00 to THB 235.00, with a trading value of THB 1.60 billion. Krung Thai Bank Public Company Limited (SET: KTB ) surged 2.44% or THB 1.00 to THB 42.00, with a trading value of THB 2.63 billion. Bangkok Bank Public Company Limited (SET: BBL ) grew by 0.53% or THB 1.00 to THB 188.00, with a trading value of THB 1.84 billion. Kiatnakin Phatra Bank Public Company Limited (SET: KKP ) jumped by 5.43% or THB 6.00 to THB 116.50, with a trading value of THB 981.50 million. TMBThanachart Bank Public Company Limited (SET: TTB ) gained 2.08% or THB 0.06 to THB 2.94, with a trading value of THB 471.23 million. Thai Credit Bank Public Company Limited (SET: CREDIT ) added 0.43% or THB 0.10 to THB 23.40, with a trading value of THB 42.77 million. LH Financial Group Public Company Limited (SET: LHFG ) was up 0.81% or THB 0.01 to THB 1.24, with a trading value of THB 4.21 million. TISCO Financial Group Public Company Limited (SET: TISCO ) increased by 0.39% or THB 0.50 to THB 130.00, with a trading value of THB 206.91 million. Mr. Koraphat Vorachet, Division Head of Research at Krungsri Securities (KSS), stated that the recent profit-taking or the so-called sell-on-fact activities following corporate earnings announcements, particularly in BBL, which experienced selling pressure from foreign investors through NVDR, appears to be subsiding. Stocks are entering a phase of forming a new price base. Analysis of foreign fund flows suggests that the movement was simply a portfolio adjustment in certain banks whose financial statements had just been released, rather than a wholesale exodus from the entire banking sector. Krungsri maintains a positive outlook for Thai commercial banks, noting that the sector continues to have potential for further rerating. Investors should not judge the attractiveness of these stocks solely by comparing them to the five-year historical average, as the sector now features a modern income structure with stronger growth potential than in the past. In particular, revenue from wealth management and bancassurance businesses has scaled up and continues to deliver increasingly robust performance. A key driver supporting growth is the overall credit expansion in Asia (excluding China), including Thailand, which has recently accelerated to a record high—the fastest growth rate since 2011, marking a 15-year peak. This signals surging credit demand from the business sector as it prepares for a new investment cycle, especially in infrastructure projects related to technology and artificial intelligence, which have become global megatrends. In terms of valuation, bank stocks are still trading at levels below their book value (less than 1x price-to-book), while interest rates have moved past their trough and are expected to remain stable. Additionally, banks are demonstrating sound asset quality management and effective control of credit costs. For investment strategy, Krungsri recommends focusing on leading names that are expected to recover and set a price base ahead of the market, highlighting KBANK, which reported the most outstanding profit in the group, as well as KTB .