Bangkok: Krungthai Bank has announced a net profit of 11,122 million baht for the second quarter of 2025, focusing on careful asset quality management and accelerating assistance to customers for debt resolution and sustainable adjustment. The bank is concerned that US import taxes may slow down exports, impacting the Thai economy.
According to Thai News Agency, Krungthai Bank's strategy emphasizes maintaining a high Coverage Ratio to support the challenging economic situation and assisting customers in overcoming debt issues. Fitch Ratings recently upgraded the bank's financial strength rating to 'bbb,' highlighting its ability to adapt qualitatively and maintain a balanced approach to stakeholder interests.
Mr. Payon Srivanich, President of Krungthai Bank, expressed concerns about the Thai economy in the latter half of the year. The potential increase in US tariffs could double, affecting Thailand's competitiveness and causing a slowdown in exports. This, in turn, could lead to an influx of foreign products into the domestic market, impacting entrepreneurs, supply chains, and workers. The tourism sector is also witnessing a slowdown, while structural issues like high household debt and an informal economy persist amidst global changes.
The bank continues to operate with caution, focusing on assisting vulnerable customer groups whose income has not fully recovered. Through initiatives like the 'You Fight, We Help Phase 2' project, Krungthai Bank is accelerating debt restructuring to support vulnerable retail and SME debtors. The bank aims to help these groups maintain essential assets and prevent worsening social problems and inequality.
In addition to these efforts, the bank is implementing measures such as reducing financial burdens through various loan consolidation programs and developing modern financial products. It adheres to the Bank of Thailand's Responsible Lending guidelines, aiming to resolve debt issues sustainably and drive economic progress.
Krungthai Bank's performance in Q2 2025 shows prudent asset quality management, with a managed NPL ratio of 2.94 percent and a high Coverage Ratio of 194.1 percent. The bank's net profit for the quarter stood at 11,122 million baht, with stable operating income supported by interest rate adjustments for customer support. Loans grew by 4.4 percent, driven by retail and government loans, with a balanced risk-return portfolio.
Comparatively, the bank's profit decreased by 5.1% from Q1 2025, influenced by the interest rate environment. However, other income expanded due to growth in Wealth Management and Money Market Business. The bank's loans increased by 0.4%, maintaining a balanced portfolio and high Coverage Ratio.
Overall, the bank's operating income for the first half of 2025 decreased by 1.1 percent compared to the previous year, though non-interest income continued to grow. Efficient expense management resulted in a Cost to Income ratio of 41.3 percent. The bank's profit for the first half of the year was 22,836 million baht, a slight decrease of 2.7 percent.
As of June 30, 2025, Krungthai Bank reported strong capital levels, with Tier 1 capital at 19.28 percent and total capital at 21.28 percent. Fitch Ratings affirmed the bank's Long-Term Foreign Currency Rating at BBB+ and upgraded its Viability Rating to 'bbb.'
In 2025, the bank is committed to driving organizational growth through strategies focusing on revenue increase, cost reduction, risk management, employee capability enhancement, and comprehensive stakeholder engagement. The recent license to operate a branchless bank marks a significant step in strategic cooperation, aiming to provide inclusive financial services and address structural issues sustainably.
The ongoing economic pressures are expected to impact the Thai economy and banking business, with potential growth below 1% in the latter half of 2025 and export value possibly contracting by over 10% compared to the previous year. Predictions for 2026 indicate an expansion of less than 2% for the Thai economy.