Krungsri sees Bangkok floods pressuring banks and finance firms, risking asset quality

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Krungsri Securities said continuous heavy rain in Bangkok and its vicinity from September 24-27, 2026, caused flooding in many areas. Its research team holds a slightly negative view on the Bank and Consumer Finance sectors because of asset quality risks, including provisioning expenses, credit cost, and non-performing loans. It estimates that for every 0.05% increase in provisioning expenses, net profit for the Bank and Consumer Finance sectors in 2027 would face downside of 2.1% and 0.9%, respectively. However, the research team expects financial institutions to roll out borrower relief measures, including debt payment holidays, lower installments and interest rates, and additional loans at special interest rates, which would help reduce the impact on asset quality. It noted that some banks have already introduced borrower relief measures and expects other financial institutions to follow with measures of their own. On investment strategy, Krungsri's research team maintains a BULLISH recommendation on the Bank sector, keeping KBANK with a target price of 300 baht and KTB with a target price of 55 baht as Top Picks. For Consumer Finance stocks, it maintains a NEUTRAL recommendation, keeping KTC with a target price of 54 baht as its Top Pick.

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Krungsri maintains NEUTRAL on consumer finance and keeps KTC as Top Pick with 54 baht target amid flood-related asset-quality concerns.