Morgan Stanley foresees a challenging period for Thai commercial banks as financial institutions prepare to report results starting in January. Loan growth remains stagnant, influenced by a -1% contraction up to November 2024, compounded by high household debt levels.
Morgan Stanley’s economist predicts a policy rate cut of 75 basis points to 1.5% by the fourth quarter of 2025, adding potential pressure on net interest margins (NIMs). Although credit quality is not expected to deliver surprises, attention will be given to the repercussions of recent government initiatives aimed at reducing household debt burdens.
Meanwhile, potential rises in dividend payouts could entice investors, yet such outcomes remain outside Morgan Stanley’s current projections.