Thai bank stocks enter earnings season: profits rebound, 7% dividend support
“Bank stocks” have strengthened, and the market is focusing on the upcoming Q2/2569 earnings season. Brokerage estimates point to positive signals for the banking sector: even if net profit may fall because of one-off items, core operating profit is showing clearer signs of recovery. Bank stocks also stand out for their high dividends, with an expected dividend yield of about 7%, supported by fund flow into large-cap stocks.
In addition, on the external side, the Federal Reserve (Fed) has signaled rising rates, prompting investment money to rotate from some growth stocks into value stocks. On the domestic side, progress on budget-related bills has provided a boost. The article notes that the budget year 2570 bill has passed its first reading, strengthening market confidence in the Thai economy and spending in the later part of the first half.
Q2/2569: Core profit recovery, NIM and asset quality still in focus
As Q3 of 2569 begins, the earnings season for listed Thai companies is gradually getting underway. The banking sector is seen as an important market indicator because it reflects financial conditions and the overall economy.
According to TISCO Securities, net profit for the banking sector in Q2/2569 may decline by about 9% from the previous quarter, due to one-off items in Q1/2569. But if we look only at core operating earnings, the recovery signal is much clearer.
On fundamentals, the banking sector remains resilient: the article says net interest margin (NIM) is expected to stay flat; fee income is starting to recover, especially in capital markets and asset management; and most banks can control operating expenses effectively.
On asset quality, the article says market fears have not worsened materially: asset quality has not deteriorated as much as expected, even though energy price pressures remain. Overall economic conditions and government measures are still providing support for businesses and consumers.
About 7% dividends: the investment appeal of bank stocks
The article stresses that the key advantage of bank stocks is their dividend profile: payouts are expected to remain close to last year’s level, with a dividend yield of about 7%, keeping them attractive within current valuation ranges.
Fund inflows and domestic budget progress: boosting large-cap bank stocks
The article says foreign funds have started flowing back into ASEAN markets, and Thailand is one of the few countries that has seen net buying since the start of the year. This is attributed to political stability and relatively low debt concerns, making foreign investors focus more on large-cap stocks, especially banks.
At the same time, capital is rotating from sectors such as energy and electronics, which had already risen sharply, into sectors with more modest gains but stronger fundamentals and dividend support, raising the chance that the banking sector will stay in focus in the second half of the year.
The article also lists some of the day’s strongest bank movers (dated 2 Jul 2569): KBANK, SCB, BBL, KTB, TTB, BAY, TISCO, CREDIT, LHFG, and KKP all rose.
For stock selection, the article highlights KBANK and KTB, saying they are large-cap stocks with greater capacity to absorb foreign flows, and that their Q2/2569 results are expected to be strong, with dividend yields above 6%.
In addition, Asia Plus Securities said the commercial bank sector showed standout performance that day, reflecting capital flowing back into large-cap Value stocks. The external driver came from the market’s positive reading of the Fed’s stance, seen as the start of an uptrend in the rate cycle, which is pushing some money out of growth stocks and into value stocks. The domestic driver is linked to the first reading of the budget spending bill for fiscal 2570.
The article notes that Q2/2569 may mark the banking sector’s temporary low point for the year, with a gradual recovery in the second half. Support comes from the expectation that NIM will likely trend higher as the rate cycle turns up. The investment strategy is to raise portfolio weight in large-cap bank stocks, with recommended names including KTB, KBANK, and BBL.
