Krungthai Bank strengthens business position with higher profitability

KTB has notably closed its profitability gap with peers, according to S&P.

Krungthai Bank (TKB), one of Thailand’s largest banks, has a “strengthened” business position thanks to its dominant franchise, improved profitability, and prudent management, said S&P.

The bank has a market share of about 18% for loans and 16% for deposits.

KTB has notably closed its profitability gap with peers.

“We believe KTB's profitability will moderate somewhat, given rate cuts in 2025 and the bank's portfolio rebalancing. That said, KTB's profitability will remain comparable with that of large Thai banks,” S&P said.

It improved its net interest margin (NIM) to 3.29% in 2024 from 2.6% in 2022, supported by higher rates, low funding costs, and provisioning costs trending down.

The reported NIM was higher than the sector average of 3%.

Credit costs will remain high, albeit moderating from levels during 2020-2023.

The bank's medium-term strategy to increase private sector lending remains unchanged, but the current shift to increased government lending is opportunistic as the bank navigates challenging macroeconomic conditions, S&P said.

“Once private sector lending picks up, NIM and return on average assets should slightly increase. We thus forecast a return on average assets of 100 bps-120 bps for the bank over the next two years,” it added.
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