ASEAN Banks: The Great Flows Migration with Fundamental Contexts

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ASEAN Banks: The Great Flows Migration with Fundamental Contexts

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02 Jul 2026 14:33:57 ET │ 28 pages

ASEAN Banks

The Great Flows Migration with Fundamental Contexts

CITI'S TAKE

Yong Hong Tan AC

[SG] Since May-26 we have seen rising interest from global investors in SG +65-6657-7873

banks as portfolios hedge against the tech sector (ASEAN banks Jun-26 yong.hong.tan@citi.com

report). A potential Jul-26 MAS steepening should support stronger SGD.

May-26 statistics highlighted loans growth +8.7%yoy, supporting SORA. Ferry Wong, CFA AC

We expect 2Q26e benign asset quality, robust sequential AUM boost and +62-21-2924-9213

better NII visibility. [TH] Euphoria has extended into Thailand banks, with ferry.wong@citi.com

dividend yield spread over local bond yield highest across ASEAN at ~4%.

We expect 2Q26e NIM to trough (Apr-26 banks cut FD rates), wealth fees

momentum to sustain sequentially, and stable/better credit costs. [MY] Key

concerns are election risks and possible US rate hike (link) could hurt NIM.

May-26 statistics highlighted better deposits growth driven by CASA.

However, Impaired loans rose and banks stepped up provisions. [PH and

ID] Interests picking up for BDO. Some interests to narrow UW despite

broad cautiousness for ID banks.

TH banks attracting foreign interest; 2024 SG banks playbook — Broadly a similar

playbook/setup to Malaysia in 2024 where AI-related names rally before banks

caught up in 2H2024e. Despite stable/lower ROE prospect due to lower rates, TH

banks extended 2025 rally post 1Q26 results. Stable/declining loans imply little

need for requirements, and initial signs of converting low-cost CASA into wealth-

fees, both supporting better RoRWA. Prospects for higher payout ratio to defend