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Introduction & Market Context
KASIKORNBANK PCL (KBANK) presented its second quarter 2025 results in August, highlighting the bank’s resilience amid a challenging macroeconomic environment. Thailand’s second-largest lender by assets has maintained stable performance despite significant downward revisions to Thai GDP growth forecasts, which have been cut from 3.70% to just 1.50% for fiscal year 2025.
The bank, established in 1945 and listed on the Stock Exchange of Thailand since 1976, currently manages assets of Bt4,375 billion ($121.5 billion) with a loan portfolio of Bt2,434 billion and deposits of Bt2,720 billion as of 1H25. KASIKORNBANK’s share price closed at Bt165 on October 7, 2025, up 0.61% for the day, and trading within its 52-week range of Bt145-173.
Financial Performance Highlights
KASIKORNBANK’s 1H25 performance shows resilience in a challenging environment, with the bank meeting most of its targets despite economic headwinds. The bank reported a return on equity (ROE) of 9.33% and return on assets (ROA) of 1.21%, maintaining solid profitability metrics even as it navigates slower growth.
As shown in the following comprehensive financial performance table, the bank achieved a net interest margin (NIM) of 3.36%, within its target range of 3.3-3.5%, though this represents a decline both year-over-year and quarter-over-quarter due to policy rate reductions:
Loan growth was negative at -2.00% year-to-date against a target of flat growth, reflecting the bank’s strategic focus on quality over quantity in its lending practices. Net fee income growth was modest at 1.17% year-over-year, falling short of the mid to high-single digit target, primarily due to softening credit fees reflecting the loan contraction.
The bank has maintained strong cost discipline with a cost-to-income ratio of 41.82%, comfortably within its target range of low to mid-40s. This reflects ongoing productivity improvements across channels, payment systems, credit operations, and wealth management.
Asset Quality and Risk Management
Despite the challenging economic environment, KASIKORNBANK has maintained stable asset quality with prudent risk management. The non-performing loan (NPL) ratio stood at 3.18% in 1H25, below the bank’s target ceiling of 3.25%. The bank has increased its NPL coverage ratio to 159% as of March 2025, reflecting a conservative provisioning policy.
The following chart illustrates the bank’s loan portfolio quality breakdown, showing the distribution across different risk stages:
The bank has strategically shifted its lending focus toward higher-quality segments, with 97% of new bookings coming from existing customers and 90% from secured loans. Additionally, 92% of new retail lending bookings were to customers with monthly income exceeding Bt30,000, further emphasizing the quality-focused approach.
Strategic Initiatives
KASIKORNBANK continues to execute its "K-Strategy" focused on navigating volatility while driving sustainable returns. The strategy emphasizes disciplined growth through reinvigorating credit performance, scaling capital-light fee income, strengthening sales and service models, creating new revenue streams, and enhancing productivity.
The following illustration shows the key progress indicators of the K-Strategy implementation:
The bank has maintained its market leadership in several key areas, including digital payments with approximately 30% market share, mutual fund assets under management (up 6.4% year-to-date), and mobile banking users. KASIKORNBANK has also established 14 strategic collaborations with other companies to expand its ecosystem and create new revenue opportunities.
Capital Management and Shareholder Returns
KASIKORNBANK maintains a robust capital position with a Capital Adequacy Ratio (CAR) of 20.7% and Common Equity Tier 1 (CET1) ratio of 17.7% as of 1H25, well above regulatory requirements and the bank’s own target of ≥15% for CET1.
The bank’s capital management strategy balances financial stability, sustainable shareholder returns, and investments for growth, as illustrated in this framework:
For fiscal year 2024, KASIKORNBANK delivered a dividend payout ratio of 47.0% and a dividend yield of 7.7%, contributing to a total shareholder return (TSR) of 22.9%. The bank has committed to a regular dividend payout ratio of ≥50% going forward, subject to maintaining its capital strength.
The historical dividend performance and capital strength are demonstrated in the following chart:
Economic Outlook and Forward Guidance
KASIKORNBANK has acknowledged significant headwinds in the economic environment, with Thai GDP growth forecasts revised downward and policy rate cuts expected to continue. The bank has adjusted its Thai policy rate forecast from 2.50% to 1.25% for 2025, reflecting the challenging conditions.
The lower interest rate environment is already impacting the bank’s net interest margin, as illustrated in this analysis:
Despite these challenges, KASIKORNBANK maintains its double-digit ROE target, though it acknowledges that the timing is dependent on macroeconomic conditions. The bank’s priorities remain unchanged: maintaining capital buffer strength with a CET1 target of ≥15%, delivering sustainable total shareholder returns with a dividend payout of ≥50%, and disciplined execution of its strategic initiatives.
Conclusion
KASIKORNBANK’s 2Q25 presentation demonstrates the bank’s resilience and strategic focus on quality over quantity in a challenging economic environment. While growth targets have been impacted by macroeconomic headwinds, the bank has maintained stable asset quality, strong capital position, and cost discipline.
The bank’s strategic emphasis on existing customer relationships, secured lending, and digital leadership positions it well to navigate the current economic uncertainty while preparing for future growth opportunities when conditions improve. Investors will be watching closely to see if KASIKORNBANK can maintain its stability while progressing toward its double-digit ROE target despite the challenging outlook for Thailand’s economy.
Full presentation:
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