A recent report from UOB Kay Hian (UOBKH) suggests that Thai banks will focus primarily on improving the quality and cleanliness of their loan portfolios in the near term.
Focus on Asset Quality and Provisions
Analyst Thanawat Thangchadakorn from UOBKH noted a positive trend in asset quality, evidenced by many banks reporting a quarter-on-quarter drop in credit costs. This indicates a healthier loan book overall. Furthermore, some banks are actively increasing their special provisions to create a stronger cushion against potential future economic uncertainties. Thangchadakorn is optimistic, stating that banks are maintaining highly prudent lending portfolios.
Loan Contraction and Capital Management
As a direct result of this cautious, quality-focused approach, UOBKH anticipates that Thai banks will likely report a contraction in loan growth for 2025 compared to the previous year.
Instead of aggressive lending, the focus is shifting to capital management and shareholder returns. Examples of this include:
TMBThanachart Bank (TTB) is expected to launch a new share buyback program early in 2026.
Krungthai Bank (KTB) is also anticipated to initiate a share buyback program.
Kasikornbank (KBANK) is reportedly exploring various capital management strategies to boost returns for its shareholders.
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