KBank warns the Middle East war will hit its loans harder in late 2026, with 10% exposure to affected markets. Thailand’s banking giant is bracing for rising risks, weaker repayments and global uncertainty while protecting borrowers and tightening lending.
Kasikornbank (KBank) is bracing for a tougher second half of 2026 as the Middle East war threatens to erode asset quality and strain borrowers tied to the region. With Iran tensions, trade uncertainty and economic risks mounting, Thailand’s third-largest lender is tightening its risk stance while supporting customers and pursuing a long-term transition towards resilience and net-zero goals.
Kasikornbank (KBank) expects the Middle East war to weigh more heavily on its asset quality during the second half of 2026. The lender said prolonged conflict has already weakened the repayment capacity of some customers.
Kattiya Indaravijaya, KBank’s chief executive, said the effects of the regional crisis are likely to intensify in the coming months. The bank has particular exposure to businesses connected with Middle Eastern markets.
Notably, these businesses account for about 10% of KBank’s total loan portfolio. In response, the lender has introduced proactive financial assistance to preserve customers’ repayment capacity and protect asset quality.
KBank faces rising Middle East exposure as it supports borrowers and protects asset quality amid war
Beyond financial support, KBank has advised affected clients to diversify their markets. Ms Kattiya said broader cooperation is needed to confront the challenges.
“Beyond financial assistance, the bank also advised customers on market diversification. Addressing these challenges requires collaboration among all relevant parties, particularly the government sector,” Ms Kattiya said.
Meanwhile, KBank is preparing for a tougher operating environment during the remainder of the year. The bank expects uncertainty from both domestic and global factors to remain elevated.
Among the key risks are the war in Iran, wider geopolitical tensions and developments in United States tariff policies. As a result, KBank will maintain a cautious approach to investment and loan expansion.
KBank keeps cautious lending strategy as Iran war and global risks cloud economic outlook ahead in 2026
Despite these pressures, the bank kept its total loan growth target between 0% and 2%. The decision followed a 1.1% year-on-year decline in total loans during the first quarter.
Retail and corporate lending remained under pressure. Retail loans dropped 1.9%, while corporate loans declined 0.8% during the quarter.
However, the SME segment delivered modest growth. KBank’s SME loan portfolio increased by 0.5% from the end of last year.
The figures reflect a mixed lending environment as businesses face economic uncertainty. In parallel, KBank continues to balance growth ambitions with stricter risk management.
Ms Kattiya said the economy and the bank’s operations will face greater uncertainty throughout the rest of 2026. The lender expects external shocks to continue influencing business conditions.
Loan weakness continues but KBank maintains its growth target as wider economic uncertainty risks remain
Separately, KBank used its 2026 Earth Jump seminar to outline its long-term sustainability strategy. The event, titled “A Bridge to Empower Action”, was hosted by the bank on Tuesday.
Ms Kattiya reaffirmed KBank’s commitment to achieving net-zero emissions by 2050 under the government’s roadmap. She said the transition should create new opportunities rather than become a burden.
As part of this strategy, KBank identified four areas requiring immediate focus. The first aims to move businesses from survival towards resilience.
The second seeks to transform regulations into opportunities for growth. The third expands the transition from large corporations to SMEs across supply chains.
Net zero transition pushes KBank to bring SMEs and supply chains into sustainability action plans
The final approach focuses on turning commitments into practical implementation and measurable results. According to Ms Kattiya, long-term success requires action rather than declarations.
On another front, KBank stressed that large corporations cannot achieve sustainability alone. The transformation must extend across entire supply chains, including SMEs.
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The resilience of major companies depends on the strength of smaller suppliers. Therefore, KBank believes practical implementation will determine the success of the net-zero transition.
The bank’s strategy highlights two simultaneous challenges. It must defend asset quality against geopolitical risks while supporting customers through economic and environmental transformation.
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