Banking Sector Shows Modest Growth in 2025
The banking industry saw a slight net profit increase of 3.6% in 2025. While larger banks struggled with lower profitability, smaller financial institutions thrived, reporting robust revenue growth.
The consolidated net profit for 11 banks listed on the Stock Exchange of Thailand (SET) totalled 265 billion baht, marking a year-on-year rise of about 3.63%. However, the performance among the six major banks varied, with some experiencing minimal growth, others remaining flat, and a few even reporting losses. This disparity is largely attributed to differing management strategies amidst ongoing economic challenges.
On the flip side, smaller banks achieved impressive double-digit profit increases. Leading the way was Land and Houses Financial Group (LHFG) with a notable 41% profit rise, followed by Kiatnakin Phatra Financial Group (KKP) at 17.5% and Thai Credit Bank at 10.8%.
Both LHFG and Thai Credit managed to expand their loan portfolios, boasting interest rates of 15.2% and 11.5%, respectively. Conversely, many larger banks saw either minimal growth or a reduction in loans, leading to a 0.64% decline in total industry loan balances year-on-year in 2025.
Krungthai Bank (KTB), which ranks as the second-largest financial institution by assets in the country, indicated in a recent filing that it anticipates the economy will grow by less than 2% in 2026, excluding crisis periods. This would be the slowest growth rate in almost three decades, lagging behind regional counterparts.
External factors such as U.S. tariffs, global economic uncertainties tied to geopolitical issues, and political divides further complicate the landscape. Domestically, the implementation of economic policies is hindered by fiscal limitations and the shift in politics following recent elections.
KTB also pointed out that significant structural challenges remain, including a large informal economy, increasing household debt, and diminished competitiveness in the corporate sector.
As for 2026, KTB plans to enhance its focus on developing future skills, speeding up the responsible use of technology and artificial intelligence, and improving its operational efficiency. These efforts aim to deliver sustainable value not just to customers but also to stakeholders.
The bank’s upcoming virtual banking initiative could further enrich customer experiences while also working to bridge gaps in access to formal financial services.
