Thai banks have been experiencing notable gains on the stock market, demonstrating strong performances amid broader market declines. Since the start of 2025, the sector has witnessed significant upward movements, particularly following discussions from the Bank of Thailand (BoT) about potentially revising the loan-to-value (LTV) ratios, which governs how much money banks can lend against the value of residential properties.
Analysts from Dao Securities have highlighted the banks’ optimistic outlook, noting how if these LTV measures are implemented, it would significantly improve access to housing loans for Thai consumers. Currently, the distribution of home loans across major banks is as follows: Siam Commercial Bank (SCB) at 32%, TMBThanachart Bank (TTB) at 26%, Krung Thai Bank (KTB) at 19%, and Kasikornbank (KBANK) at 17%.
Given this scenario, the analysts have suggested maintaining an “overweight” investment stance on these banks, with KTB and Bangkok Bank (BBL) considered top picks due to their favorable valuations and solid dividend yields. KTB, for example, saw its stock price surge by over 14%, ranking as the highest gainer among the listed banks up to mid-February 2025.
Despite the overall volatility of the Stock Exchange of Thailand (SET), which has dipped by more than 137 points during the same period, the banking sector remains resilient. The cumulative market cap among the top-performing banks has increased sharply, with many showing price climbs of between 14% and 30% compared to the previous months.
These developments have adequately positioned KTB, which recently announced dividends higher than market expectations, resulting not only from improved earnings but also from prudent management of non-performing loans (NPLs). The payout of 1.545 baht per share, yielding about 6.4%, showcases KTB’s strong commitment to returning value to shareholders. Analysts expect the bank’s return on equity (ROE) to rise to 10.30% following this increase.
The boost to the banking sector is largely attributed to the anticipated changes to the LTV regulations, which can potentially lead to greater lending capacity amid higher demand for home ownership. The real estate industry's consultation with the central bank indicates proactive measures to address lending constraints faced by prospective homebuyers.
Beyond the immediate benefits, these reforms are seen as part of wider government efforts to stimulate the housing market, which has faced challenges over the past few years due to economic pressures and rising costs. These measures could play pivotal roles in revitalizing home loan markets where public access remains restricted.
While the future appearances of such regulatory adjustments remain uncertain, the speculative buzz they have created among investors and market analysts suggests good things to come for the Thai banking sector. There is optimism not only about improvements in loan processing times and accessibility but also about overall economic recovery, driven by constructive financial policies.
The attention to revisions of home loan regulations is significant as both lenders and borrowers await outcomes which may positively influence credit availability. If enacted, these measures stand to provide the boost needed for many to access homes they could not before. The ripple effect of easing loan conditions will not just benefit banks but could help stimulate the housing market overall.
The ability of consumers to secure loans under new guidelines could trigger increased demand for housing, generating substantial activity across construction and related sectors, feeding back positively onto the banks involved. Further, should these regulatory adaptations take place, stronger performance and stock stability could be anticipated for Thai banks as they engage with broader public sentiment about home ownership.
Overall, the developments surrounding Thai interest rate subsidies and the potential modification of LTV regulations reflect both proactive banking sector strategies and responsive governmental policy frameworks aimed at bolstering economic growth through improved housing finance access.