Equity Analysis /
Thailand

Bangkok Bank PCL: BBL’s turn—ready to shine!

  • Loan growth to continue

  • NIM—ready to fly

  • Improving asset quality and lighter LLPs

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

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Bualuang Securities
16 November 2022

Loan growth and NIM will drive BBL’s 2023 profit ex-pansion. Economic recovery will support loan growth and higher interest rates will boost NIM. Moreover, we expect lighter LLPs in 2023 (improving asset quality).

Loan growth to continue

BBL forecasts GDP growth in the 3-4% range for 2022 and 2-3% for 2023 (it expects a global economic slowdown in 2023, which it believes will dampen Thai GDP expansion somewhat). We anticipate that loan demand (both working capital and project finance) will rise, 4Q22 through 2023 (chiefly tourism-related businesses). Moreover, BBL will expand its ex-Thailand portfolio (as part of its strategy to become a major regional banking player). Hence, we model for loan growth of 9% for 2022 (BBL’s portfolio was up 8.1% YTD as of end-Sep) and 4% for 2023, with expansion across the retail, corporate, and ex-Thailand portfolios.