Bangkok: Krungsri Bank has raised concerns over the potential for the Thai economy to grow below 2% in the coming years, citing persistent structural issues that need urgent attention.
According to Thai News Agency, Krungsri CEO highlighted that the Thai economy in 2026 will face pressures from multiple fronts, projecting a growth rate of less than 2% and signaling the possibility of a one-time policy interest rate cut. He underscored the importance of political stability for foreign investors and urged the new government to tackle long-term structural problems. Krungsri remains committed to its 'One Krungsri for a Sustainable Future' strategy, targeting a 2-4% loan growth to steer the Thai economy towards sustainable development. The CEO also expressed ongoing concerns about the vulnerabilities faced by SMEs, exacerbated by debt burdens and an economic slowdown, and reaffirmed the bank's support for them.
Mr. Kenichi Yamato, President and CEO of Bank of Ayutthaya Public Company Limited, noted that the global economy in 2026 is likely to experience uneven growth due to geopolitical conflicts. Thailand's growth, expected to be under 2%, is further pressured by high household debt levels. He suggested that there could be another policy interest rate cut within the year.
Foreign investors are focused on political stability, long-term policies, and supportive investment measures, which are crucial for multinational corporations' investment decisions. They also anticipate that the new government will address structural issues to enhance investor confidence in the country's developmental trajectory.
Mr. Kenichi addressed comparisons made by foreign media likening Thailand to the "Sick Man of Asia," contending that the economic challenges are chronic but not insurmountable. He emphasized the necessity for long-term solutions rather than temporary fixes to enhance competitiveness and foster sustainable growth. Policies should encourage collaboration between the public and private sectors to restore competitiveness and ensure sustainable long-term growth.
Krungsri's business strategy for 2026, under the "One Krungsri for a Sustainable Future" banner, identifies five key areas for sustainable growth: reducing household debt, strengthening SMEs, boosting national competitiveness, advancing climate initiatives, and enhancing financial system confidence. These efforts are supported by three strategic pillars: improving customer experiences with tailored financial solutions, accelerating AI and digital technology adoption, and fostering collaboration within the Krungsri Group to deliver integrated financial services.
For 2026, Krungsri aims for loan growth between 2-4% and a net interest margin (NIM) of 4.0-4.3%, with domestic NIM projected at 3.25-3.50% and an expense-to-income ratio in the mid-40s. The bank also seeks to advance its Net Zero sustainability goal, targeting 350 billion baht in financial support for social and sustainable ventures, while developing financial solutions to bolster the entire value chain for sustainable growth.
Ms. Duangdao Wongpanitkrit, Head of Financial and Strategic Business Support Group at Krungsri Bank, noted that the domestic strategy will focus on expanding in large corporate and Japanese client segments. The bank plans to invest in future industries, including data centers, semiconductors, and electric vehicles, particularly as Japanese car manufacturers ramp up hybrid and EV production in Thailand.
Despite the challenges facing SMEs, Krungsri is committed to supporting them, even as loan volumes may stabilize or decline due to debt repayments. The bank is prepared to adjust criteria to maintain liquidity for ongoing business operations.
Krungsri derives about 20% of its revenue from overseas, despite a loan portfolio representing only 5% of the total, indicating robust profitability. The bank continues to explore growth opportunities through mergers and acquisitions.