But analysts said the second half was looking weaker for the banking sector due to high inflation, rising interest rates and domestic political uncertainties that are likely to hurt consumer confidence and loan demand.

KBANK expected its net interest margin to meet a 4 percent target after it hit 4.12 percent in the first six months, although the bank offered higher interest rates on certain deposits during the quarter to attract funds, Prasarn said.

The bank has said it would expand high-yielding loans to small and medium businesses to help it achieve the net interest margin of 4 percent.

Shares in Kasikornbank KBAN.BK closed down 0.72 percent at 69 baht on Thursday, when the main Thai index .SETI fell 0.38 percent. ($1=33.43 Baht) (Reporting by Manunphattr Dhanananphorn; Writing by Arada Therdthammakun; Editing by Alan Raybould)