Thailand’s Kasikorn Bank expects credit costs to normalize in 2025

The bank says that it will end its loan portfolio clean up this year.

Kasikorn Bank (KBank) expects its credit costs to normalise in 2025 and eyes double-digit return of equity (ROE) by 2026.

In a conference hosted by UOB Kay Hian (UOBKH), KBank said that it expects to end its “clean-up process” of its loan portfolio in 2024.

KBank believes that its credit costs have already peaked and maintains a credit cost target of 175 to 195 basis points for 2024. It maintained its normalised credit cost target of 140-160bp for 2025. 

However, KBank no longer expects to achieve its 2024 loan growth target, saying that it is now prioritizing its asset quality.

Looking ahead, the Thai bank is committed to achieving its target of a double-digit ROE by 2026, touting its “3+1” strategy: credit, free, and channel, as well as new revenue creation in the medium and long-term.

“The bank will prioritise quality by focusing on existing clients they know well. Meanwhile, KBANK expects the contribution of new revenue creation at 5% to the bottom line in the next five years,” said Thanawat Thangchadakorn, analyst, UOB Kay Hian (UOBKH).