TMBThanachart Bank faces 7% profit drop as tax relief ends: CGS

The lender expects to exhaust THB2b in remaining benefits by early 2027.

Thailand's TMBThanachart Bank (TTB) is expected to report a 7% decline in net profit in 2027 as its remaining tax benefits expire, according to CGS International.

In a 20 October report, the brokerage forecast the bank's net profit at $621.4m (THB20.88b) in 2027, down from an estimated $668.2m (THB22.45b) in 2026. Profit is expected to recover by 2.6% to $637.8m (THB21.43b) in 2028.

The expected decline comes as TTB prepares to use up its remaining $59.5m (THB2b) in tax benefits by the first quarter of 2027. The bank expects to return to its normal tax rate of 20% from the second quarter.

Despite the expected profit decline, CGS International raised its earnings forecasts for 2027 and 2028 by 6.3% and 7.4%, respectively, citing higher expected lending growth, stronger fee income, and lower provisions for bad loans.

The brokerage now expects loans to grow 3.5% annually in 2027 and 2028, compared with its earlier forecasts of 2% and 3%.

TTB plans to expand lending in higher-interest products, including used-car loans, loans secured against vehicles and homes, credit cards, and unsecured personal loans.

Fee income is forecast to increase 6.4% in 2027 and 3.6% in 2028. Meanwhile, the amount set aside for potential loan losses is expected to fall from 1.25% of loans to 1.16% in 2027.

The bank also expects Thailand's policy interest rate to rise from its current 1% level in 2027 and plans to adjust its deposit offerings to manage funding costs.

For the third quarter of 2026, TTB reported a net profit of $162.5m (THB5.46b), up 3% from a year earlier but down 0.9% from the previous quarter.

Profit for the first nine months reached $476.2m (THB16b), an increase of 4.8% from a year earlier.

CGS International identified rising unpaid loans, particularly in vehicle and unsecured consumer lending, as a key risk to its forecasts. Vehicle-related loans accounted for 28% of the bank's total loans at the end of September, whilst credit card and personal loans made up another 8%.

Weaker consumer spending could also affect fee income from insurance sales, mutual funds, and credit cards.

($1 = THB33.6)