Earnings Report /
Thailand

Kasikornbank PCL: Deep miss! Heavier LLPs than modeled

  • Earnings were 68% below our expectation

  • KBANK posted 4Q22 earnings of Bt3.2bn

  • Gross loans were up 1.3% QoQ as of YE22

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

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Bualuang Securities
20 January 2023

Our BUY call is premised on loan growth in 2023 (driven by corporate and retail business) and a fatter NIM (supported by high-yield lending business expansion and higher interest rates). However, there would be downside risk to our 2023 earnings forecast, if KBANK’s asset quality were to deteriorate further than assumed. Because of our downsized 2023 profit forecast, we have cut our YE23 target price from Bt177 to Bt172.50, pegged to a PBV of 0.7x (1.5SD below its long-term mean of 1.35x).

Earnings were 68% below our expectation

KBANK posted 4Q22 earnings of Bt3.2bn, down by 68% YoY and 70% QoQ. The result was 68% below our projection (and 64% lower than the Bloomberg consensus), due to heavier LLPs than modeled. Pre-provision operating profit came to Bt28.3bn, up by 29% YoY and 21% QoQ. Full-year earnings comprise only 84% of our 2022 projection of Bt42.6bn.