First Read: Thai Banks "2026 AIC: controllable credit quality and sustai..."

Research evidence excerpt

First Read: Thai Banks "2026 AIC: controllable credit quality and sustai..."

Global Research

26 May 2026ab

First Read

EquitiesThai Banks

2026 AIC: controllable credit quality and Asia Pacific Ex. Japan

sustainable DPS Banks, Ex-S&L

Peach Patharavanakul

Analyst

peach.patharavanakul@ubs.com

Macro outlook update +662-613 5717

BBL management attended the Asian Investment Conference 2026 today. Whilst

exports have driven better-than-expected GDP in Q126, this was driven mainly by

transshipment. BBL kept its GDP growth forecast around 1.5-2% given weakness in

tourism may remain fragile amid a broader macro uncertainty. BBL maintains its positive

outlook on FDI from new industries i.e. data centers, software, EV, etc. On the inflation

front, BBL expects the sharp increase in oil prices could push CPI from near 0% currently

to around 5% over the next 12 months.

Credit quality outlook

BBL informed that a surge in NPLs in Q126 was mostly due to a relapse of its restructured

loans, which should be able to be restructured and upgrade loan stage back to

performing loans by Q426. Hence, although oil inflation and Middle East tension should

later affect credit quality, BBL believes that the bank can manage overall credit quality

because the majority of its customers are large corporates which are resilient enough to

withstand macroeconomic risks and should be able to pass on higher costs. Specific

cases such as Thai Airways are being managed conservatively, with fair value changes

recognized through equity (FVOCI) and provision reversals from debt-to-equity

conversion retained in management overlay (MOL) buffers rather than booked as

earnings.

Capital management policy update

The bank continues to balance earnings distribution with prudence for stakeholders.