Citigroup said banks are likely to report overall strong earnings for the April-June quarter and big banks with diversified earnings sources look set to outperform small banks seen suffering from rising cost of funds.
"With loan growth running at 15 percent year on year pace, the sector should report overall strong earnings," said Citi in a research note dated July 13.
The broker said it expected earnings beat from banks with diversified revenue including Kasikornbank Pcl and Bank of Ayudhya Pcl and strong top line growth from those such as Siam Commercial Bank Pcl.
Small banks might continue to suffer from the rising cost of funds as bills of exchange regulatory fee continues to trickle in, it said.
Big banks are due to release their quarterly results this week, followed by the earnings announcements by non-financial firms which run to the middle of August.
Citi expected weak quarterly profits for non-financials, with carrier Thai Airways International Pcl likely to miss estimates due to weak long-haul passenger yields.
Quarterly results of the refinery and chemicals sector would be weak due to inventory losses while the retail sector results would be soft due to rising costs on wage increases, it said.
At the mid session break of 0530 GMT, the bank subindex edged up 1.05 percent while the broader market was up 0.68 percent.
Reporting by Viparat Jantraprap in Bangkok; email@example.com