Thai Banks: Soffer Q226E earnings; dividends still underpin valuation upside potential

Research evidence excerpt

Thai Banks: Soffer Q226E earnings; dividends still underpin valuation upside potential

Global Research

25 June 2026ab

Thai Banks Equities

Asia Pacific Ex. JapanSofter Q226E earnings; dividends still underpin

valuation upside potential Banks, Ex-S&L

Peach Patharavanakul

Analyst

peach.patharavanakul@ubs.com

Softer earnings in Q226E; valuation upside potential remains on PE approach +662-613 5717

Overall, Q226E earnings indicate a soft operating environment, with NIM pressure and

weaker non-NII weighing on YoY and QoQ performance despite offsets from cost

control and provision normalization. While NIMs likely neared a trough in Q2, credit

quality risks may re-emerge in late H226, as restructuring relief fades and NPL formation

gradually rises. Nonetheless, strong capital buffers and proactive NPL management

could help sustain attractive dividend payouts. Yield attractiveness, political stability and

valuations relative to regional peers may drive capital inflow, with PE-based valuations

still presenting up to 19% total return, based on our projections.

Q226E earnings indicate NIM pressure and softer non-NII

We anticipate Q226 earnings for our covered banks to decline 4% YoY and 6% QoQ.

We attribute the YoY weakness primarily to NIM contraction, outweighing the benefits

of provision normalization, a wealth fee recovery from a low base and effective opex

management. QoQ weakness may be largely driven by utilization of LLR buffers to

manage credit costs, which failed to offset lower trading and dividend income from a

high base, continued NIM contraction (albeit at a slower rate), a seasonal opex increase

and weaker fee income. KKP may emerge as the key YoY outperformer due to strong

capital market income, followed by KTB, benefitting from improved non-NII and cost