Strong market position and franchise as the fourth-largest bank in Thailand. Above-average earnings and adequate capital. Government support due to the bank's high systemic importance. Pressure on asset quality owing to difficulties in the small and midsize enterprise (SME) sector as a result of high economic risk. Challenging economic environment. The CreditWatch placement with negative implications reflects a one-in-two probability of a downgrade over the next six to 12 months. KASIKORNBANK PCL's (KBank) asset quality and financial performance could deteriorate, given the rising economic risk. In our opinion, the bank is exposed to a risk of greater credit losses than its domestic peers due to its sizable exposure to the more vulnerable SME segment. We could downgrade KBank in the
