EXIM BANK advises exporters to explore alternative transportation routes to the Middle East to ensure uninterrupted trade and comprehensively manage trade risks in the Middle Eastern market.

The Business Research Department of the Export-Import Bank of Thailand (EXIM BANK) revealed that escalating and prolonged tensions in the Middle East are becoming a significant shock to the global economy and trade, especially as the conflict spreads to affect transportation along strategic routes such as the Strait of Hormuz, a major transportation artery in the Middle East, reflecting geopolitical vulnerability in the region.

At the same time, the risk is not limited to one point but is beginning to expand to the Bab-el-Mandeb Strait in the Red Sea, another important logistics route for the world and the Middle East. Under these uncertain circumstances, EXIM BANK recommends that exporters plan their transportation and look for alternative logistics routes in case the main routes face limitations, in order to adapt and comprehensively manage trade risks in the Middle Eastern market.

Key export markets in this region are the United Arab Emirates (UAE) and Saudi Arabia. In addition to the existing main transport routes, EXIM BANK recommends alternative transport routes using a multimodal transport strategy for the route from Thailand to Dubai, UAE. There are two options: (1) Docking at Fujairah Port, UAE. Once the containers are unloaded and customs clearance is completed, they will be transported by truck via the strategic Sheikh Khalifa Highway, which cuts through the Hajar Mountains, and then into Dubai.

After that, some goods may be distributed by road to other countries in the Persian Gulf. This route has the advantage of speed, with a land transport distance of only 130-150 kilometers, taking only 2-3 hours. However, this route has security concerns as Fujairah Port was previously attacked by missiles. (2) Docking at Sohar Port, Oman. After customs clearance, trucks will continue on the Batinah Highway, passing through Al Wajajah (Oman)-Hatta (UAE) customs, and then using the Dubai-Hatta Highway to enter Dubai. This route involves a land transport distance of 200-220 kilometers and takes 2.5-3 hours, but requires passing through customs on both the Omani and UAE sides.

For the route from Thailand to Riyadh, the capital of Saudi Arabia, the usual method uses the ports of Jeddah and Damman, followed by onward transport by train or truck. However, if the Strait of Hormuz and Bab-el-Mandeb have restrictions, it may be necessary to use an Omani port as the first gateway before continuing by truck into Saudi Arabia. Goods from Thailand will dock at the Sohar port in northern Oman. From there, the truck convoy will travel southwest to Ibri before entering the Ramlat Khaliya (Oman)-Rub' al Khali (Saudi Arabia) customs checkpoint. From there, they will continue to connect with the new Rub' al Khali Highway, which cuts through the desert, to continue on to Riyadh. The total land transport distance is 1,400 kilometers. Goods destined for other cities, such as Jeddah, will be distributed further via road/rail.

However, it is important for businesses to consider that the Sohar port is not a major port. It may be necessary to use feeder ships from other major ports, such as the Port of Salalah, which will increase costs and travel time. Land transport would also involve traversing the desert, increasing the risk of damage to goods from heat and sandstorms.

Such logistics route adjustments will inevitably lead to higher management costs and longer transit times. These will directly pressure business liquidity. Thai exporters should therefore plan their strategies carefully and meticulously, assess risks comprehensively, and utilize financial tools effectively amidst the uncertain geopolitical landscape. EXIM BANK is committed to supporting Thai exporters in all situations, providing comprehensive advice to ensure the continued and stable progress of Thai trade.

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Ms. Kattiya Indaravijaya, Chief Executive Officer of KASIKORNBANK, said in early 2026, the Thai economy experienced a significant shift following the escalation of tensions in the Middle East in late February 2026. Prior to this development, the economy had shown signs of a gradual recovery in line with the expansion of domestic economic activity. However, heightened geopolitical risks have since dampened confidence and in turn affected both domestic and global economic prospects. Consequently, the Thai economic performance overall in the first quarter of 2026 is projected to grow at a slower rate, attributable to weakening private and public domestic spending, coupled with a contraction in international tourist arrivals. Furthermore, the export and industrial manufacturing sectors have become increasingly fragile.

For the full-year outlook, the Thai economy in 2026 is projected to grow within a range of 0.8% - 1.2% (as of April 2026). This outlook remains highly uncertain due to escalating tensions in the Middle East. The Thai economy is being impacted by rising energy and logistics costs, which are driving up inflationary pressure. This, in turn, is being passed on to the cost of living and household purchasing power. Businesses have become increasingly cautious in their investment and production planning. Furthermore, international tourist arrivals have significantly declined, while the government faces fiscal policy constraints due to the need to maintain fiscal stability amid rising public debt risks. If the situation persists, the economy will face risks of raw material shortages and supply chain disruptions, creating further downward pressure on the economic recovery going forward.

KASIKORNBANK continues to operate the business with prudence, through the execution of K-Strategy 3+1 and Productivity to deliver sustainable value to all stakeholders while generating stable returns for shareholders. At the same time, the Bank further strengthens the “Customer Strategy” by deepening the holistic understanding of customer needs and continuously developing products and services to address customer needs across all dimensions. In addition, the Bank closely monitors and assesses developments amid a highly uncertain economic environment in order to support customers in navigating ongoing uncertainty, while fully supporting relevant government policies.

Operating performance for the first quarter of 2026 compared with the same quarter of the previous year, the Bank and its subsidiaries reported net profit attributable to equity holders of the Bank of Baht 14,667 million, an increase of Baht 876 million or 6.35%. Excluding a one-time compensation income from investment of Baht 1,455 million, net profit attributable to equity holders of the Bank would have been Baht 13,378 million, a decrease of Baht 413 million or 2.99% from the same quarter of the previous year. Such net profit has not yet reflected the impact of geopolitical tensions in the Middle East that emerged toward the end of the first quarter. As these tensions are expected to be prolonged, economic uncertainty has increased, which may pose risks to future operating performance. The decline in net profit was partly attributable to net interest income amounting to Baht 31,957 million, a decrease of Baht 3,468 million or 9.79%. Net interest margin (NIM) stood at 2.95%, declining in line with market conditions.

In addition, the Bank reduced interest rates during 2025 to support customer liquidity and alleviate customers’ financial burdens, together with continued sluggish loans growth. Meanwhile, non - interest income increased, mainly due to: 1) income from wealth management services and brokerage fees, which grew during the early part of the year and has not yet reflected the impact of the Middle East situation; 2) investment income arising from realized gains under favorable market conditions; and 3) improved performance in insurance services. Other operating expenses amounted to Baht 19,279 million, a decrease of Baht 773 million or 3.85%, mainly due to a decrease in employee expenses in line with the implementation of the human resource management strategic plan, together with continued productivity improvements. As a result, a cost to income ratio stood at 38.93%. Additionally, the Bank and its subsidiaries maintained a prudent policy for expected credit loss (ECL) to ensure an appropriate level of ECL to support the economic uncertainties and future challenges arising from heightened volatility both domestically and internationally, with risks expected to increase. Accordingly, expected credit loss in this quarter amounted to Baht 9,823 million, broadly in line with the same quarter of the previous year and consistent with the Bank’s previously communicated guidance.

Operating performance for the first quarter of 2026 compared with the fourth quarter of 2025, the Bank and its subsidiaries reported net interest income of Baht 31,957 million, a decrease of Baht 956 million or 2.90% and non - interest income of Baht 17,564 million, an increase of Baht 2,625 million or 17.57%. Excluding a large one-off compensation income from investment of Baht 1,455 million, non - interest income would have been Baht 16,095 million, an increase of Baht 1,156 million or 7.74%, mainly driven by an increase in income from wealth management service and investment income, which have not yet reflected the impact of geopolitical tensions in the Middle East that emerged toward the end of the first quarter. As these tensions are expected to be prolonged, economic uncertainty has increased, which may pose risks to future operating performance. Other operating expenses amounted to Baht 19,279 million, a decrease of Baht 3,748 million or 16.28%, due to seasonal spending in the previous quarter, along with prudent and effective cost control. In addition, the Bank and its subsidiaries continued to prudently set aside ECL of Baht 9,823 million, to support the ongoing economic uncertainties amid a continued economic slowdown and future challenges arising from heightened volatility both domestically and internationally, with risks expected to increase.

As of 31 March 2026, the Bank and its subsidiaries’ total assets were Baht 4,539,958 million, a decrease of Baht 18,660 million or 0.41% compared with total assets as of 31 December 2025. The decrease was primarily attributable to lower net interbank and money market items, as a result of KBank’s liquidity management, as well as a decline in net loans in line with continued economic slowdown. The Bank remains focused on quality loans expansion with appropriate risk-adjusted returns, while continuing to support customers and placing ongoing emphasis on asset quality. Nevertheless, net investments increased, reflecting investment decisions based on market expectations and interest rate trends. NPL gross to total loans stood at 3.19%, requiring close monitoring of asset quality amid persistent economic uncertainties and increasing risks. Coverage ratio increased to 171.72%. As of 31 March 2026, KASIKORNBANK FINANCIAL CONGLOMERATE’s capital adequacy ratio (CAR) according to the Basel III Accord remained strong at 19.95%.

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