SCB X eye more profits from Gen 2 firms as Thai corporates cut bank loans

Its banking services loan portfolio contracted in 2024, whilst those from Gen 2 expanded.

Siam Commercial Bank X (SCB X) expects its Gen 2 businesses to contribute more profit in the coming years amidst Thai corporates moving away from bank loan dependence.

SCB notably struggled to compete in attracting high-quality large corporations to take up loans, noted UOB Kay Hian (UOBKH). This is because Thai corporates have adopted deleveraging by reducing their dependence on bank loans.

For 2025, SCB has guided for a loan growth target of just 1% to 3%, saying that it will prioritise good asset quality.

In 2024, its Gen 1 business (banking services) loan portfolio contracted 2.1% year-on-year (YoY).

In contrast, its Gen 2 companies’ loan portfolio expanded by 4.2% YoY during the same year.

“SCB expects its Gen 2 business to contribute more profit in 2025,” said UOBKH analyst Thanawat Thangchadakorn.

“Thai corporates have adopted deleveraging by issuing debentures and reducing their dependence on bank loans. SCB might face some challenges from domestic debentures,” Thangchadakorn said.