Bangkok Bank stays upbeat on Thailand’s medium‑term outlook

The bank kept its 2026 financial guidance unchanged. 

Bangkok Bank remains optimistic about Thailand’s economic outlook over the next three to five years, expecting foreign direct investment to support private‑sector growth, though short‑term macro headwinds and geopolitical tensions continue to warrant caution, according to a CGS International research note.

For 2026, the bank maintained its financial guidance, including a targeted loan growth of 2% to 3%, a non-performing loan ratio of 3%, a net interest margin of 2.4% to 2.5%, low single-digit net fee income growth, a high-40s cost-to-income ratio, and a credit cost of 100 basis points.

The brokerage firm expects net interest margin performance to improve in the second half of 2026, driven by stable loan yields and increased credit demand from large corporate clients. 

Overseas, first-half loan expansion at Indonesian subsidiary Permata Bank was similarly supported by corporate and small-to-medium enterprise lending, whilst residential housing loan growth was tightened amidst interest rate competition.

Fee income growth is expected to face pressure through 2027 following new Bank of Thailand regulations that standardised and lowered retail and small business service charges from 1 July 2026. 

To offset regulatory impacts, the bank intends to expand cross-selling initiatives for wealth management services aimed at high-net-worth depositors.

The brokerage cited the bank's conservative capital management strategy and a relatively low dividend payout ratio of 40% as key factors supporting a valuation discount compared to domestic banking peers. 

Downside risks include potential global trade disruptions affecting international lending demand and higher-than-expected non-interest technology expenses. 

Conversely, lower credit costs supported by a 306% non-performing loan coverage ratio and stronger loan demand in Indonesia represent upside risks to the current forecasts.