KASIKORNBANK PCL

The bank's widespread domestic branch network and established franchise have also enabled it to tap stable retail deposits with manageable funding costs. Low-cost current and savings account deposits contributed around 80% to the bank's total deposits as of September 2023. This ratio was one of the highest in the industry. The stable outlook on KBank reflects our view of the bank's strong market position as one of the largest banks in Thailand, its good capitalization, stable deposit base, and likelihood of government support. The ratings already factor in some deterioration in asset quality over the next 12-24 months. We could downgrade KBank in the next 12-24 months if we believe credit conditions for banks in Thailand will deteriorate significantly beyond

...Credit losses are likely to remain elevated over the next one to two years. We forecast KASIKORNBANK PCL's (KBank) nonperforming loans (NPLs) will increase gradually over the period as forbearance and restructuring measures unwind. The overall impact is likely to be manageable, given the bank's active NPL management and pre-emptive provisioning. We expect KBank's credit costs to be 1.9%-2.1% for 2024 and 1.7%-1.8% for 2025, higher than those of other large peers. The bank's credit costs are likely to decline and converge with peer average in later years. KBank will remain focused on preserving asset quality amid tough operating conditions. About 6.8% of the bank's loan book as on Sept. 30, 2023, is under debt relief programs. This ratio is slightly better than that of peers. In our view, KBank's underwriting standards are prudent, and the bank has adequate risk-management mechanisms. It has been able to mitigate risks from inherently higher-risk SME loans with strong client selection and...

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