Thailand’s finance sector’s credit costs to rise in Q3 on cautious provisioning

Credit costs are expected to decline in Q4 thanks to stimulus packages.

Thailand’s finance sector is expected to report a net profit of about $198.64m (THB6.5b) in Q3 2025, rising by 11% year-on-year but lower by 12% compared to the previous quarter, according to estimates by UOB Kay Hian (UOBKH).

Credit costs are expected to increase by 38 basis points (bp) in Q3 compared to the previous quarter on cautious provisioning. Overall, though, credit costs are expected to still be lower than a year earlier.

“We expect credit costs to jump 38bp qoq to 376bp in 3Q25 from 338bp in 2Q25. Finance companies under our coverage will add provision expenses in 3Q25, creating a buffer for potential future uncertainties,” said UOBKH analyst Thanawat Thangchadakorn.

Various government stimulus packages should lead to credit costs declining in Q4 compared to Q3.

“We expect the government’s various stimulus packages to result in better debt collection and improved asset quality for the sector in Q4 2025. Concurrently, we expect the sector’s credit costs, especially for auto-title loan operators, to report a QoQ reduction in Q4,” Thangchadakorn said.

(US$1 = THB32.72; as of 10 October 2025, Morningstar via Google)