Company Coverage
Krung Thai Bank (KTB TB): Reiterates Strong Asset Quality Outlook In 2H26
BUY (Maintained)
Current price:
Target price:
Upside:
Bt44.00
Bt52.00
18.2%
Analyst
Highlights
- Positive tone during analyst meeting.
- Credit cost should come in within the 2026 target range, but not near the high end.
- Maintain BUY with an unchanged target price of Bt52.00.
Analysis
- Positive tone during analyst meeting. We attended Krungthai Bank’s (KTB) analyst meeting and came away with a positive view.
- Expect loans to surge significantly in 4Q26. The CFO expects 4Q26 loan demand to come mainly from corporate loans and the SME segment, driven by SME Credit Boost programme. Meanwhile, the government loan segment in KTB’s loan portfolio has benefitted from government stimulus projects. For retail loans, KTB will focus on growing housing loans. Going forward, we should see a shift in mix toward less government loans and more corporate loans based on risk appetite, alongside an increase in SME loans. We expect KTB’s loan to exceed its 2026 target of 0-2%.
- NIM has bottomed in 2Q26. KTB’s 2Q26 NIM saw the full impact of the previous rate cut and should stabilise going forward. KTB expects NIM to end in the mid-to-high range of its 2026 target of 2.35-2.5% (vs 2.47% in 1H26). The CFO guided that the bank has already booked a mark-to-market gain on Thai Airways International (THAI) of about 25% of total shareholding in Feb 26. Meanwhile, the remaining 75% of the shareholding in THAI is waiting to be booked for a mark-to-market gain.
- Expect expenses to be higher in 2H26 but within target range. KTB said that its cost-to-income ratio was seasonally lower in 1H and expects higher costs in 2H due to marketing campaigns launched in preparation for 2027. However, the bank maintains its cost-to-income ratio target at the low-to-mid 40s level (vs 38.9% in 1H26). The bank remains focused on cost efficiency.
- To maintain coverage ratio at the current high level. The CFO said the asset quality in 1H26 is manageable. Hence, the bank has no need to add more provisions, which resulted in a qoq decline in credit costs in 2Q26. Full-year credit cost should come in within the 2026 target range of 75-115bp (vs 105bp in 1H26). KTB also guided that credit cost in 2026 will not come in near the high end of the target range. However, the coverage ratio should remain broadly stable at its current high level of around 200% (with no intention to reach the targeted 170%).
Highlights
- Positive tone during analyst meeting.
- Credit cost should come in within the 2026 target range, but not near the high end.
- Maintain BUY with an unchanged target price of Bt52.00.
Analysis
- Positive tone during analyst meeting. We attended Krungthai Bank’s (KTB) analyst meeting and came away with a positive view.
- Expect loans to surge significantly in 4Q26. The CFO expects 4Q26 loan demand to come mainly from corporate loans and the SME segment, driven by SME Credit Boost programme. Meanwhile, the government loan segment in KTB’s loan portfolio has benefitted from government stimulus projects. For retail loans, KTB will focus on growing housing loans. Going forward, we should see a shift in mix toward less government loans and more corporate loans based on risk appetite, alongside an increase in SME loans. We expect KTB’s loan to exceed its 2026 target of 0-2%.
- NIM has bottomed in 2Q26. KTB’s 2Q26 NIM saw the full impact of the previous rate cut and should stabilise going forward. KTB expects NIM to end in the mid-to-high range of its 2026 target of 2.35-2.5% (vs 2.47% in 1H26). The CFO guided that the bank has already booked a mark-to-market gain on Thai Airways International (THAI) of about 25% of total shareholding in Feb 26. Meanwhile, the remaining 75% of the shareholding in THAI is waiting to be booked for a mark-to-market gain.
- Expect expenses to be higher in 2H26 but within target range. KTB said that its cost-to-income ratio was seasonally lower in 1H and expects higher costs in 2H due to marketing campaigns launched in preparation for 2027. However, the bank maintains its cost-to-income ratio target at the low-to-mid 40s level (vs 38.9% in 1H26). The bank remains focused on cost efficiency.
- To maintain coverage ratio at the current high level. The CFO said the asset quality in 1H26 is manageable. Hence, the bank has no need to add more provisions, which resulted in a qoq decline in credit costs in 2Q26. Full-year credit cost should come in within the 2026 target range of 75-115bp (vs 105bp in 1H26). KTB also guided that credit cost in 2026 will not come in near the high end of the target range. However, the coverage ratio should remain broadly stable at its current high level of around 200% (with no intention to reach the targeted 170%).
BUY (Maintained)
Current price:
Target price:
Upside:
Bt44.00
Bt52.00
18.2%
Analyst
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This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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