Earnings Report /

Kiatnakin Bank PCL: Miss, due to heavy LLPs

  • Profit was 16% below our estimate

  • KKP posted 4Q20 earnings of Bt1.11bn

  • At YE20, KKP’s loan portfolio was up by 3.9% QoQ and 12.7% YoY

Bualuang Securities
20 January 2021

Assuming that the economy recovers to near the pre-COVID level sometime in 2H21, we expect KKP to report stronger YoY numbers for 2021, driven by loan growth and sharply higher fee income. The stock currently trades at a YE21 PBV of 0.9x (below its long-term mean). We also assume dividend yields of 5.3% for 2020 and 5.8% for 2021, the highest among our Bank coverage. BUY!

Profit was 16% below our estimate  

KKP posted 4Q20 earnings of Bt1.11bn, down by 34% YoY and 18% QoQ. The result was 2% above the Bloomberg consensus, but was 16% below our estimate, due to heavier LLPs, and smaller investment gains than assumed. However, KKP marked a NIM of 4.8% (we had assumed only 4.3%). 4Q20 pre-provision operating profit was Bt3.4bn, up by 40% YoY and 37% QoQ. 2020 earnings slid 14% YoY to Bt5.1bn, which comprises 96.0% of our full-year projection of Bt5.3bn.