Krungthai Bank sees costs staying in line as its prepares JV for bad loans

The Thai bank believes that wealth management will drive its income growth through 2028.

Krungthai Bank (KTB) is confident that its credit costs will remain in line with its target range as it prepares to set up a joint venture to manage bad loans, and even if the Middle East war lasts until the second half of 2026.

“Management reiterates that KTB’s asset quality remains under control while KTB is preparing to set up a joint venture (JV) in distressed asset management to manage [nonperforming loans (NPLs) and [nonperforming assets (NPAs)],” said Weerapat Wonk-Urai, analyst for CGS International (CGSI).

KTB expects to set up this JV by the end of 2026.

Separately, the Thai bank believes that wealth management will drive its income growth over the next two years, although it did not disclose its targets for assets under management (AUM) and assets under advisory.

“We think KTB has growth potential in the wealth management business based on its large market share in deposits but the bank would have to integrate wealth management into  its core strategy, revamp its wealth products and increase relationship manager  capacity,” Wonk-Urai said.

CGSI expects KTB to keep its attractive dividend yields of 6.5% to 7.1% per annum between 2026 to 2028.

Risks include rising NPLs from housing and unsecured loans, and interest rate cuts. On the other hand, strong growth in government and state-owned enterprises (SOE) loans, and a lower cost-to-income ratio, will be to KTB’s favor.