Ms. Kattiya Indaravijaya, Chief Executive Officer of KASIKORNBANK, said in early 2026, the Thai economy experienced a significant shift following the escalation of tensions in the Middle East in late February 2026. Prior to this development, the economy had shown signs of a gradual recovery in line with the expansion of domestic economic activity. However, heightened geopolitical risks have since dampened confidence and in turn affected both domestic and global economic prospects. Consequently, the Thai economic performance overall in the first quarter of 2026 is projected to grow at a slower rate, attributable to weakening private and public domestic spending, coupled with a contraction in international tourist arrivals. Furthermore, the export and industrial manufacturing sectors have become increasingly fragile.
For the full-year outlook, the Thai economy in 2026 is projected to grow within a range of 0.8% - 1.2% (as of April 2026). This outlook remains highly uncertain due to escalating tensions in the Middle East. The Thai economy is being impacted by rising energy and logistics costs, which are driving up inflationary pressure. This, in turn, is being passed on to the cost of living and household purchasing power. Businesses have become increasingly cautious in their investment and production planning. Furthermore, international tourist arrivals have significantly declined, while the government faces fiscal policy constraints due to the need to maintain fiscal stability amid rising public debt risks. If the situation persists, the economy will face risks of raw material shortages and supply chain disruptions, creating further downward pressure on the economic recovery going forward.
KASIKORNBANK continues to operate the business with prudence, through the execution of K-Strategy 3+1 and Productivity to deliver sustainable value to all stakeholders while generating stable returns for shareholders. At the same time, the Bank further strengthens the "Customer Strategy" by deepening the holistic understanding of customer needs and continuously developing products and services to address customer needs across all dimensions. In addition, the Bank closely monitors and assesses developments amid a highly uncertain economic environment in order to support customers in navigating ongoing uncertainty, while fully supporting relevant government policies.
Operating performance for the first quarter of 2026 compared with the same quarter of the previous year, the Bank and its subsidiaries reported net profit attributable to equity holders of the Bank of Baht 14,667 million, an increase of Baht 876 million or 6.35%. Excluding a one-time compensation income from investment of Baht 1,455 million, net profit attributable to equity holders of the Bank would have been Baht 13,378 million, a decrease of Baht 413 million or 2.99% from the same quarter of the previous year. Such net profit has not yet reflected the impact of geopolitical tensions in the Middle East that emerged toward the end of the first quarter. As these tensions are expected to be prolonged, economic uncertainty has increased, which may pose risks to future operating performance. The decline in net profit was partly attributable to net interest income amounting to Baht 31,957 million, a decrease of Baht 3,468 million or 9.79%. Net interest margin (NIM) stood at 2.95%, declining in line with market conditions. In addition, the Bank reduced interest rates during 2025 to support customer liquidity and alleviate customers' financial burdens, together with continued sluggish loans growth. Meanwhile, non - interest income increased, mainly due to: 1) income from wealth management services and brokerage fees, which grew during the early part of the year and has not yet reflected the impact of the Middle East situation; 2) investment income arising from realized gains under favorable market conditions; and 3) improved performance in insurance services. Other operating expenses amounted to Baht 19,279 million, a decrease of Baht 773 million or 3.85%, mainly due to a decrease in employee expenses in line with the implementation of the human resource management strategic plan, together with continued productivity improvements. As a result, a cost to income ratio stood at 38.93%. Additionally, the Bank and its subsidiaries maintained a prudent policy for expected credit loss (ECL) to ensure an appropriate level of ECL to support the economic uncertainties and future challenges arising from heightened volatility both domestically and internationally, with risks expected to increase. Accordingly, expected credit loss in this quarter amounted to Baht 9,823 million, broadly in line with the same quarter of the previous year and consistent with the Bank's previously communicated guidance.
Operating performance for the first quarter of 2026 compared with the fourth quarter of 2025, the Bank and its subsidiaries reported net interest income of Baht 31,957 million, a decrease of Baht 956 million or 2.90% and non - interest income of Baht 17,564 million, an increase of Baht 2,625 million or 17.57%. Excluding a large one-off compensation income from investment of Baht 1,455 million, non - interest income would have been Baht 16,095 million, an increase of Baht 1,156 million or 7.74%, mainly driven by an increase in income from wealth management service and investment income, which have not yet reflected the impact of geopolitical tensions in the Middle East that emerged toward the end of the first quarter. As these tensions are expected to be prolonged, economic uncertainty has increased, which may pose risks to future operating performance. Other operating expenses amounted to Baht 19,279 million, a decrease of Baht 3,748 million or 16.28%, due to seasonal spending in the previous quarter, along with prudent and effective cost control. In addition, the Bank and its subsidiaries continued to prudently set aside ECL of Baht 9,823 million, to support the ongoing economic uncertainties amid a continued economic slowdown and future challenges arising from heightened volatility both domestically and internationally, with risks expected to increase.
As of 31 March 2026, the Bank and its subsidiaries' total assets were Baht 4,539,958 million, a decrease of Baht 18,660 million or 0.41% compared with total assets as of 31 December 2025. The decrease was primarily attributable to lower net interbank and money market items, as a result of KBank's liquidity management, as well as a decline in net loans in line with continued economic slowdown. The Bank remains focused on quality loans expansion with appropriate risk-adjusted returns, while continuing to support customers and placing ongoing emphasis on asset quality. Nevertheless, net investments increased, reflecting investment decisions based on market expectations and interest rate trends. NPL gross to total loans stood at 3.19%, requiring close monitoring of asset quality amid persistent economic uncertainties and increasing risks. Coverage ratio increased to 171.72%. As of 31 March 2026, KASIKORNBANK FINANCIAL CONGLOMERATE's capital adequacy ratio (CAR) according to the Basel III Accord remained strong at 19.95%.
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