During the Q2/2026 earnings season, although many commercial banks reported results that exceeded analysts' expectations and showed strong growth, the stock market reaction was not aligned with these positive fundamentals.
In this morning’s trading, at market close around 12:30 p.m., banking stocks faced simultaneous heavy selling pressure, causing prices to fall across nearly the entire sector — a phenomenon described as a "red board across the board."
This downward adjustment has raised investors' concerns about why stocks with strong profit growth are being heavily sold off, and whether this is a time to be cautious or an opportunity to accumulate shares. Thairath Money investigates to find answers.
Kitipan Praiphaisanakit, Deputy Managing Director of Research and Strategist at UOB Kay Hian (Thailand), commented to Thairath Money that the banking sector's announced earnings were "better than expected."
Contrary to previous expectations of stagnant profit growth, many banks showed profit increases both quarter-over-quarter (QoQ) and year-over-year (YoY).
However, the share price decline is attributed to the banking stocks having recently surged alongside the Thai stock index reaching about 1,616 points,
a level not seen since 2013, marking a key resistance tested after roughly 13 years.
The significant recent price gains mean investors have varying cost bases, making short-term profit-taking normal after positive earnings announcements have been absorbed.
Looking ahead to the second half, Kitipan assesses that performance may be less impressive than in the first half, as banking stocks were very cheap earlier, with low market expectations and attractive dividend yields of 6-7%, but with recent price gains, dividend yields have fallen to about 4-5%.
Additionally, banking sector earnings are typically stronger in the first half than the latter half, and while growth is expected to continue, share prices no longer trade at the deep discounts seen previously.
Nonetheless, in the medium term, the banking sector outlook remains positive, with price-to-book value ratios (P/BV) around 1 times, still below historical trading levels of 1.35 to 2 times.
For those interested in investing in banking stocks, Kitipan advises "not to chase prices" at this time, as historical patterns show profit-taking typically lasts for at least one to two weeks after earnings announcements, sometimes longer.
Therefore, despite medium-term upside potential, the short-term strategy should focus on "waiting for the right opportunity" rather than buying immediately after positive earnings news has been priced in.
He recommends Bangkok Bank Public Company Limited (BBL) as a standout stock, noting that many banks have already deployed excess liquidity to improve return on equity (ROE) through special dividends, share buybacks, or dividend increases.
BBL has yet to initiate such measures, so for investors seeking banks with potential positive upside or hidden benefits from future capital restructuring, BBL appears the most attractive in the group.
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