SCB X Public Company Limited

The baht opened today at 32.82 baht per dollar, weakening from yesterday's close of 32.76 baht per dollar, following the US PCE inflation index coming in higher than expected, supporting a Fed rate hike. The Financial Markets Group of Siam Commercial Bank assesses a trading range of 32.70 - 32.95 baht per dollar. Meanwhile, the Monetary Policy Committee unanimously voted to hold the policy rate at 1.00% per annum, and the parliament approved a 400 billion baht borrowing decree to address the energy crisis and restructure the country. Investors assign a 54.7% probability that the Fed will raise interest rates by at least 0.25% at its October meeting, after the headline PCE index rose 3.7%, higher than the forecast of 3.6%, while core PCE stood at 3.3% as expected. Investors are watching for a speech by Fed Chair Kevin Warsh at the Jackson Hole meeting on Friday for signals on the direction of rates, amid inflation above the 2% target and US government debt surging above 40 trillion dollars.

KGI Securities views that commercial banks will gradually pay interim dividends for the first half of 2026, expecting KKP and TTB to offer attractive yields. Meanwhile, SCB, KKP, KTB, and TISCO have full-year dividend yields exceeding 6%. TTB has announced an interim dividend of 0.081 baht per share, with the XD date on September 7, 2026, and payment on September 25, 2026. KGI expects KKP to pay a total dividend of 7.65 baht per share for 2026, representing a yield of 6.7%; KTB to pay 2.73 baht per share, yielding 6.2%; SCB to pay 11 baht per share, yielding 7.2%; and TISCO to pay 7.75 baht per share, yielding 6.2%. Meanwhile, KBANK is expected to pay 14.50 baht per share, yielding 5.7%; BBL to pay 10 baht per share, yielding 5.3%; and TTB to pay 0.14 baht per share, yielding 4.9%. KGI continues to favor KBANK and KTB over other banks, citing that loan recovery and net interest margin (NIM) have bottomed out and will support performance. KKP is also favored due to strong profit growth of 65% year-on-year in the first half of 2026 and the potential for credit costs to fall below 1%.

Siam Commercial Bank and Krungthai Bank expect the Monetary Policy Committee meeting on 26 August to keep the policy rate at 1.00% through 2027, to support a Thai economy that is still recovering slowly and growing unevenly, especially among vulnerable groups, households, and SMEs that still carry high debt and face tight financial conditions, while inflation pressures have eased. Poon Panichpibool, market strategist at Krungthai Global Markets, Krungthai Bank, said the MPC will keep rates at this level whether or not the Fed raises rates, because the Thai economy is still expanding below potential, and he believes the Thai-US interest rate differential will not pressure the baht into sharp volatility because the Bank of Thailand has sufficient tools to manage it. Wachirawat Banchuen, senior financial market strategist at Siam Commercial Bank, cited three supporting reasons: lower inflation risk, uneven Thai economic growth, and tight financial conditions, especially with about 24% of SME loans classified as Stage 2-3, carrying high default risk. He also views 1% as likely the lowest point in this cycle, barring an unexpected economic or energy crisis, and expects the Thai policy rate could rise to 1.75-2.00% by 2029-2030.

Finansia Syrus Securities said commercial bank loans under its coverage expanded 0.1% month on month in July 2026, bringing overall growth to 2.4% from the same period a year earlier and 2.6% since the start of the year, above its full-year estimate of 1.7%. Krung Thai Bank, or KTB, posted the strongest monthly loan growth at 2.1%, followed by Kiatnakin Phatra Bank, or KKP, up 1.1%, and Tisco Financial Group, or TISCO, up 0.1%. Bangkok Bank, or BBL, Kasikornbank, or KBANK, SCB X, or SCB, and TMBThanachart Bank, or TTB, saw loan contraction. Loan growth was concentrated mainly in state enterprise and business loans, supported by demand for production credit, inventory build-up from higher oil prices, and various investment projects. Retail loans were mixed, with housing loans, personal loans, and some secured loans still growing. Total deposits in July rose 0.6% from the previous month, 4.3% from a year earlier, and 2.0% since the start of the year, growing faster than loans and leaving the group's loan-to-deposit ratio at a comfortable 83.2%. KBANK, KKP, KTB, SCB, and TTB all recorded deposit growth, especially in current and savings accounts. FSS expects banking group earnings to remain strong during 2026 to 2028, as fee income from wealth management and capital markets, cost control, and good asset quality help offset softer net interest income. Strong business loan demand and well-managed funding costs are also supportive of net interest margins. Third-quarter 2026 profit is expected to be flat or slightly higher than the previous quarter. FSS picks BBL with a target price of 240 baht and KTB with a target price of 47.30 baht as top picks. It also maintains buy ratings on KKP with a target price of 125 baht, KBANK at 265 baht, TTB at 3.05 baht, and SCB at 170 baht, while recommending a hold on TISCO with a target price of 132 baht, citing an attractive average dividend yield of about 5% per year.

Yuanta Securities expects net profit of Bangkok Commercial Asset Management, or BAM, to accelerate markedly in the second half of 2026. It forecasts second-quarter 2026 net profit at 263 million baht, down 79.7 percent from a year earlier but up 21.2 percent from the previous quarter, supported by net interest income expected to rise 10.6 percent quarter-on-quarter and non-interest income expected to grow 13.6 percent from recovering sales of NPL and NPA assets, although provisioning is set to increase 12.9 percent from the prior quarter partly to cover a large bad-debt purchase from SCB worth around 6 billion baht. The research team maintains its full-year 2026 net profit forecast at 1.655 billion baht, down 8.7 percent from the previous year, and keeps a buy recommendation with a 2027 target price of 9 baht per share, implying 29.5 percent upside and an expected dividend yield of 6.6 percent.

Thai commercial bank stocks extended their rebound after analysts raised target prices and earnings estimates. KTB was at 42.25 baht, up 0.60 percent, BBL at 189 baht, up 1.07 percent, KBANK at 237 baht, up 1.28 percent, SCB at 153 baht, up 0.33 percent, and TTB at 2.92 baht, up 0.69 percent. Analysts at Krungsri Securities raised their net profit forecasts for the banking sector in 2026 and 2027 by 2.6 percent and 4.2 percent to 221 billion baht and 229 billion baht, respectively, and rolled forward to 2027 target prices. They picked KBANK and KTB as top picks, recommending buy on KBANK with a target of 300 baht and buy on KTB with a target of 55 baht. Meanwhile, BBL and TTB were upgraded to buy with targets of 225 baht and 3.50 baht, while SCB was rated hold with a target of 155 baht. KKP was rated buy with a target of 145 baht, and TISCO was downgraded to reduce with a target of 115 baht. The sector is also expected to pay high dividend yields of 5 to 6 percent for 2026, supported by strong capital positions and no major investment plans. The research team maintained a positive view on the sector, expecting 2027 ROE to improve as the rate-cutting cycle ends and a government investment cycle worth over 8 trillion baht resumes, along with growth in wealth management. Bank stocks are trading at a PBV of just 0.9 times, below historical averages and below ASEAN peers.

Krungsri Securities, or KSS, has raised its net profit forecasts for the commercial banking sector in 2026 and 2027 by 2.6% and 4.2% to 221 billion baht and 229 billion baht, respectively, while rolling forward to 2027 target prices. It selects Kasikornbank, or KBANK, and Krung Thai Bank, or KTB, as standout stocks in the group. KSS recommends buying KBANK with a target price of 300 baht, forecasting net profits of 53.1 billion baht in 2026 and 55.7 billion baht in 2027, benefiting from the investment cycle and wealth management business. For KTB, it recommends buying with a target price of 55 baht, citing strength in asset quality and government investment. For other banks, KSS has revised recommendations and target prices: BBL to buy at 225 baht, SCB to hold at 155 baht, TTB to buy at 3.50 baht, KKP to buy at 145 baht, and TISCO to reduce investment at 115 baht. The research team expects the banking sector to pay dividends in 2026 with high yields of 5 to 6 percent, supported by strong capital positions and no major investment plans weighing on them. It maintains a positive view on the sector, forecasting a rise in 2027 return on equity driven by the end of the rate-cutting cycle, the return of government investment worth over 8 trillion baht, and growth in wealth management. Moreover, banking stocks are trading at a price-to-book value of just 0.9 times, below historical averages and ASEAN peers.

Mr. Chaiyos Jiwangkul, Assistant Director of the Securities Analysis Department at Krungsri Securities, or KSS, said the Thai stock market is likely to consolidate in the short term, even as regional markets improve following a recovery in global tech stocks. This could slow the foreign capital inflows that had previously shifted from tech shares into the Thai market. There is a chance of money rotating out of bank stocks after their earnings announcements and into energy, petrochemical, and communication stocks, supported by rising oil prices and expectations of good second-quarter 2026 profits. Meanwhile, buying interest has started to return for ADVANC and TRUE. In the banking sector, earnings have come in both above and below expectations, so stocks with unimpressive results may still face selling pressure, especially BBL and SCB. Although SCB reported good profits, its non-performing loans, or NPLs, increased. However, if prices fall significantly, buying is expected to return as loan growth still has potential from a new investment cycle. Regarding the Thailand Investment Savings Account, or TISA, Mr. Chaiyos said that if the tax deduction limit is set as high as 600,000 baht and allows direct investment in the Thai stock market, it would be a positive factor for liquidity and help reduce volatility, as investors would need to hold for the long term. The main investor base would likely be salaried workers and office employees, similar to RMF and Thai ESG funds. As for the BOI to IPO measures, details on business types and company sizes need to be monitored. If large companies in new industries can be attracted to list, it would boost market capitalization and the appeal of the Thai stock market, but if only small companies are involved, the overall market impact may be limited. On investment strategy, KSS recommends buying PTT Global Chemical, or PTTGC, with a target price of 45 baht, expecting second-quarter 2026 profits of around 9 billion baht, driven by recovering product spreads and lower-than-expected stock losses. It also recommends buying Indorama Ventures, or IVL, with a target price of 27 baht, expecting second-quarter 2026 profits of around 6 billion baht from improving product price spreads.