Thailand-based banks experienced a broadly flat second quarter in 2026, with overall earnings remaining largely steady compared to the first quarter, according to a report by UOB Kay Hian (UOBKH). The sector’s combined net profit dipped 1% year-on-year and 3% quarter-on-quarter to $1.9 billion (THB 63.7 billion), with fee and service revenue helping to bolster earnings.
Net interest income (NII) fell 7% year-on-year while staying flat sequentially, bringing the sector’s net interest margin (NIM) to 3.42% for the quarter. Meanwhile, non-interest income grew 13% compared to the same period last year, though it showed little change from Q1. Performance varied across the industry: major lenders with heavy corporate loan portfolios experienced sequential drops in NII, whereas smaller financial institutions saw interest income expand.
Looking ahead, UOBKH analysts Thanawat Thangchadakorn and Panjarat Thaweesriprasert noted that several banks anticipate NIMs to improve after likely reaching a trough in Q2. Sector-wide asset quality has also strengthened, reflected in a 13-basis-point year-on-year reduction in credit costs. Additionally, the analysts expect Thai lenders to preserve their dividend payout ratios throughout 2026.
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