Thai banks’ earnings expected to drop 9% in Q2 on higher credit costs

Kiatnakin Phatra and SCB X will likely log an increase in credit costs.

Thailand’s banking sector is expected to log a 9% year-on-year (YoY) drop in earnings in Q2 2025 on higher credit costs and lower pre-provisioning operating profit, according to UOB Kay Hian (UOBKH).

The brokerage firm expects the Thai banks under its coverage to report an aggregate net profit of about $1.47b (THB48.6b). This is 9% YoY and 17% quarter-on-quarter (QoQ) lower than previous periods.

Excluding provision expenses, the banking selector’s pre-provision operating profit is expected to decline 9% YoY and 11% QoQ, respectively, according to UOBKH analyst Thanawat Thangchadakorn.

Credit costs are expected to come higher in Q2 compared to Q1, rising between 11 basis points (bp) to 151bp during the quarter.

Amongst lenders, Kiatnakin Phatra (KKP) is expected to report an increase in credit costs due to uneven recovery in the auto market.

SCB X is also expected to post higher credit cost on cautious provisioning.

Tisco Financial Group will also likely log an increase in credit costs, having earlier guided for a 2025 credit cost target of 100bp.

Banks overall are expected to be more cautious in lending so as to maintain good asset quality, Thangchadakorn said.

(US$1 = THB33.01; as of 23 June 2025, Google, from Morningstar)