(Jan 21): Two of Thailand’s largest banks warned of a tough business environment this year after reporting worse-than-expected fourth-quarter earnings, underscoring the strain a weakening economy is placing on lenders’ businesses.
Bangkok Bank pcl, the country’s largest commercial lender by assets, reported a fourth-quarter profit of 7.76 billion baht, a 25% decline from a year earlier. Kasikornbank pcl posted a 5% decline in the quarterly net income while SCB X pcl’s earnings in the quarter slid 13%.
The poor earnings will add selling pressure to most banking shares after their recent rally, ASL Securities Co said in a research note.
The results highlight the sluggish economy’s toll on demand for loans in Thailand’s banking sector ahead of the Feb 8 general election. Soft consumer demand, elevated household debt and political uncertainty are expected to keep pressure on profitability in 2026.
Thailand’s economy is lagging behind regional peers, leading the Bank of Thailand to lower its key interest rate to 1.5%, a level only seen during major global downturns and the pandemic.
“Thailand’s economy will continue its slow pace of growth in 2026 with US tariffs and trade tensions,” Kattiya Indaravijaya, CEO of Kasikornbank, said in a statement Wednesday (Jan 21). “Private investment and domestic consumption will also be hurt by local political uncertainty.”
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Bangkok Bank is facing multifaceted challenges from geopolitical tensions affecting global trade while adapting to rapidly changing technology and innovations, the bank said in a statement late Tuesday.
SCB X pcl targets loan growth in the low-to-mid single digits in 2026, reflecting its cautious stance amid economic uncertainties, CEO Arthid Nanthawithaya said in a statement Wednesday. The bank reported fourth-quarter net income of 10.14 billion baht, below analysts’ estimate of 10.75 billion baht.
The measure of Thai banking shares slid 1.6% midday, setting the gauge for its biggest drop since Oct 27. Shares of Bangkok Bank led the declines, slumping as much as 6.7% Wednesday, the biggest intraday loss since June 2020. Kasikornbank lost 0.5%, while SCB X slid 1.1%.
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