Kasikornbank (KBank) and TMBThanachart Bank (ttb) want to normalise their credit costs this year by enhancing asset quality while maintaining stable loan growth.
Kattiya Indaravijaya, chief executive of KBank, said the bank set a target for normalised credit costs in 2025 of 140-160 basis points (bps), down from 175-195 bps in 2024.
As part of this normalisation plan, KBank expects total loan growth to remain flat this year, following a marginal 0.57% increase last year.
The primary target for loans this year should be upper-income customers in the mortgage and credit card segments, she said.
Ms Kattiya said the bank aims to lower its net interest margin (NIM) to 3.3-3.5% in 2025, down from 3.64% last year, aligning with the bank's selective loan growth strategy, debt relief programmes and the downward trend in interest rates.
According to Kasikorn Research Center, the Bank of Thailand is expected to cut its policy rate twice this year, bringing it down from 2% to 1.75% by the end of the year.
Ms Kattiya said KBank is also focused on improving return on equity (ROE) to double digits by 2026. The bank has steadily improved its ROE from 7.38% in 2022 to 8.29% in 2023 and 8.99% in 2024, according to its investor presentation.
The anticipated double-digit ROE will be driven by enhanced credit capabilities, a scaling up of capital-light fee income businesses, and the strengthening and innovation of sales and service models, she said. Key contributors to fee-based income include cross-border businesses such as trade finance, foreign exchange and payment services.
Digital banking remains a core pillar of KBank's strategy. The bank plans to increase digital onboarding to 63% by the end of the year, up from 57% in 2024.
In addition, KBank expects to grow its digital banking user base on K-Plus and K-Biz, which serve retail and small and medium-sized enterprise customers, to 23.9 million and 2.1 million, respectively, by the end of this year.
Similarly, ttb plans to reduce its credit costs to 125-135 bps this year, down from 154 bps last year, aligning with its normalised level of 135 bps, according to the bank's investor presentation.
"Under our sustainable banking strategy, we aim to maintain credit costs at 125-135 basis points over the longer term, excluding any additional provisions," said chief executive Piti Tantakasem.
The bank projects marginal loan growth of 0-2% in 2025, while its NIM is expected to decline slightly to 3.1-3.25% from 3.26% last year. For its long-term strategy over 3-5 years, ttb targets an ROE exceeding 10%, up from the current 8.92%, continuing its upward trend since 2019.
