Investment gains boost Thai banks’ Q2 performances

Banks’ net profit is expected to soften in H2 2025.

Thai banks’ Q2 2025 performances were boosted by investment gains, but the same trend is unlikely to recur in the second half of the year, says UOB Kay Hian (UOBKH).

Combined net profit rose 5% year-on-year (YoY) to THB53.3b. This beat the brokerage house’s expectations by 16%, and market estimates by 7%, said UOBKH analyst Thanawat Thangchadakorn.

Investment gains boosted results, with many banks reporting a quarterly increase on financial instruments measured at fair value through profit or loss (FVPL). There was also a net investment gain, which helped lift the bottom line above forecasts.

Based on UOBKH’s checks with banks, this investment gain stemmed from realised gains on debt securities measured at fair value through other comprehensive income (FVOCI), which are typically unrealised and do not affect the income statement.

“However, given the currently low bond yield levels, we do not expect further material investment gains to be reported in H2 2025. Therefore, we expect the net profit for the banking sector to soften in H2 2025,” Thangchadakorn said.

Thangchadakorn and UOBKH expect more rate cuts from the Bank of Thailand (BOT) following the nomination of the new governor, Vitai Ratanakorn, the former director of the Government Savings Bank (GSB).

“In our view, Vitai is likely to be more aligned with fiscal policy and more amenable to the government’s objectives,” Thangchadakorn said.

Thangchadakorn noted, however, that the market may be concerned that the new governor’s influence could lead to significant regulatory changes.

“The market expects two policy rate cuts, lowering the rate to 1.25% by the end-2025,” Thangchadakorn said.

With the new BOT governor’s term beginning on 1 October 2025, UOBKH anticipates the earliest possible rate cut to take place at the 8 October 2025 meeting.