Equity Analysis /

Thailand: Bank - Asset quality—well begun is half done!

  • 2Q22 aggregate profit beat our estimate and the street

  • Aggregate lending rose by 6.4% YoY and 1.0% QoQ

  • NPLs down 1.5% YoY but up 0.4% QoQ

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
25 July 2022

The 2Q22 aggregate profit of the eight banks under coverage was 4.9% above our estimate (mainly due to lighter LLPs than assumed). For 2022, we forecast aggregate earnings of Bt204.3bn, up 14% YoY, led by lighter LLPs, fatter NIMs, and loan growth. Our OVERWEIGHT sector weighting stands. KBANK and BBL are our top picks.

2Q22 aggregate profit beat our estimate and the street

The eight banks under coverage posted aggregate 2Q22 earnings of Bt51.3bn, up 2% YoY but down 1% QoQ. The number was 4.9% above our projection, and 4.4% ahead of the consensus. KBANK, SCB, and TISCO were in line with our expectations. The profits of BAY, KKP, KTB, and TTB beat our models, mostly because of lighter LLPs than assumed (lighter LLPs and OPEX for KTB). In contrast, BBL missed our estimate (heavier OPEX and LLPs than expected).