KGI flags 3.8% drop in Thai bank stocks on flood and NPL news, picks KBANK, KTB, TTB, KKP as top choices
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KGI Securities said Thai banking stocks fell an average of 3.8% from the previous week as of October 2, 2026, amid concerns over the impact of flooding on the real economy, slowing third-quarter 2026 earnings prospects, and a Fitch Ratings warning that Thai banks' NPL ratios are higher than those of regional peers, compounded by selling pressure in ASEAN banking stocks, particularly KBANK and KTB. The Federation of Thai Industries estimated preliminary damage to the industrial sector alone from five days of flooding in Bangkok and 14 other provinces at 1.02 billion baht, assuming 40% of members in affected areas were hit, while overall economic damage nationwide was estimated at 11 to 12.3 billion baht, still far below the damage from the great flood crisis of 2011, which the World Bank estimated at as much as 1.4 trillion baht. KGI highlighted four top picks: KBANK, KTB, TTB and KKP. KBANK, KKP and TTB benefit from wealth management businesses that account for as much as 80% of KKP's total fee income, about 60% for TTB and 45% for KBANK, while KTB will benefit mainly from a loan recovery. Meanwhile, KTB announced the establishment of two new subsidiaries, Krungthai Alliance Holding Co., Ltd. and Krungthai Capital Holding Co., Ltd., operating under Krungthai Holding Co., Ltd., in which KTB holds a 99.99% stake. Krungthai Alliance Holding will focus on infrastructure support services and digital technology businesses, while Krungthai Capital Holding will pursue wealth management, investment platforms and insurance businesses. Risk factors to watch are bad debt and potentially higher provisions, fee income below expectations, and losses from fair value measurement through profit or loss on investments.