Thai Bank Stocks See Profit Recovery and 7% Dividend Opportunity
Q2/69 Banking Performance Signals Positive: Core Profit Begins Recovery
"Bank stocks" are showing positive adjustments as Thai listed companies prepare to announce Q2 2026 results. Securities firms assess that the banking sector shows encouraging signs: even if net profit may decline, core operating profit shows clearer recovery signals.
Key points include: although net profit may drop about 9% from the previous quarter (considering one-time items in Q1), after excluding one-off factors, core profit is expected to gradually improve in subsequent quarters.
Core Fundamentals Still Strong: NIM Stable, Fee Income Recovers, Asset Quality Controllable
Analysts point out that the banking sector's fundamentals remain solid. Net interest margin (NIM) is expected to remain stable; fee income is starting to recover, especially related to capital market businesses and asset management; while most banks continue to effectively control operating expenses.
In terms of asset quality, the market had feared deterioration under energy price pressure, but non-performing loans (NPL) have not significantly worsened. The overall economy and government measures still provide support for businesses and households.
7% Dividend Attractiveness and Fund Inflow: Rate Cycle and Domestic Budget Benefit
A highlight of bank stocks is high dividends. The market expects a dividend yield of about 7%, making them attractive at current price levels.
Additionally, fund flow is supportive: foreign capital is returning to regional markets. Thailand is one of the few countries with net buying since early this year, due to political stability and low debt compared to many countries, leading foreign investors to prefer large-cap stocks, benefiting the banking sector.
From a sector rotation perspective, the market is also shifting some funds from previously strong energy and electronics stocks into banks, which have lower relative gains but stronger fundamentals and dividend support. This is expected to sustain attention in the second half of 2026.
Meanwhile, on the macro front, external factors come from the Fed signaling "rate hikes," making investors focus more on interest rate cycle changes and prompting rotation from growth stocks to value stocks. Banks are one of the benefiting sectors.
Domestically, the budget bill for fiscal year 2027 passed its first reading, supporting confidence in Thailand's economic outlook and government spending in the second half.
Market Performance and Institutional Recommendations: Focus on KBANK, KTB, BBL
In trading on July 2, 2026, the banking sector stood out, with leading stocks including: KBANK (+6.88% to 233 baht), SCB (+4.07% to 153.50 baht), BBL (+6.11% to 191 baht), KTB (+4.61% to 39.75 baht). Other stocks include TTB, BAY, TISCO, CREDIT, LHFG, KKP, etc.
Research views suggest that Q2 2026 results for the banking sector could be the "low point" of the year, followed by gradual recovery in the second half, supported by NIM turning upward with the rate cycle. Investment strategy recommends allocating to large commercial banks, with stock focus on KTB, KBANK, BBL.
Analysts further noted that the rise in bank stocks also reflects fund rotation into large-cap value stocks: under the combined influence of external rate cycle signals and domestic budget benefits, the market may continue to increase weighting in bank stocks.
