Bangkok: Kasikornbank (KBANK) has set aside 9,823 million baht in provisions to address economic fluctuations, despite reporting a net profit increase of 14,667 million baht for the first quarter of 2026, marking a 6.35% rise. However, the bank experienced a 9.79% drop in net interest income due to reduced interest rates aimed at assisting customers and mitigating a slowdown in lending.
According to Thai News Agency, Ms. Khattiya Indravichai, Chief Executive Officer of Kasikornbank, noted that excluding a one-time investment compensation of 1,455 million baht, the bank's net profit would have been 13,378 million baht, reflecting a decrease of 413 million baht or 2.9% compared to the previous year. Net interest income fell to 31,957 million baht due to the bank's strategy of lowering interest rates to support customers amid a slowdown in loan growth.
The current net profit figures do not account for the geopolitical tensions in the Middle East, which emerged at the end of the first quarter. The ongoing situation is expected to heighten economic uncertainty and pose risks to future performance. To counter these challenges, the bank and its subsidiaries have adopted a cautious approach by maintaining provisions for expected credit losses, ensuring they are well-prepared to manage economic uncertainties and challenges domestically and internationally. Consequently, provisions of 9,823 million baht were set aside, consistent with the same quarter of the previous year.
The Thai economy is projected to grow between 0.8-1.2% in 2026. However, the uncertainty surrounding the Middle East situation casts a shadow over the economic outlook, affecting cost of living, household purchasing power, and causing a significant drop in foreign tourist numbers. Businesses have become more cautious regarding investments and production planning. Government efforts to implement economic stimulus policies are constrained by fiscal stability considerations and the risk of rising public debt. If tensions persist, the Thai economy could face risks from raw material shortages and supply chain disruptions, further pressuring economic recovery.
In comparison to the fourth quarter of 2025, KBANK and its subsidiaries reported a net interest income of 31,957 million baht for the first quarter of 2026, a decline of 2.90%. Non-interest income rose to 17,564 million baht, a 17.57% increase. Excluding the one-time investment compensation, non-interest income was 16,095 million baht, up by 7.74%, driven by increased income from wealth management services and investment activities. These figures do not yet reflect the impact of Middle Eastern tensions, which are likely to prolong economic uncertainty and risk future performance.
Operating expenses amounted to 19,279 million baht, a decrease of 16.28% due to seasonal factors affecting previous quarter expenses and prudent spending control. The bank's continued conservative approach led to setting aside a 9,823 million baht provision for expected credit losses to address ongoing economic slowdown uncertainties and future challenges from both domestic and international sources, which remain highly volatile and risky.