We expect several commercial banks to raise interest rates on fixed deposits (but not on CASA accounts). NIMs will drive 2023 profit growth. We have an OVER-WEIGHT sector call. BBL and KBANK are our top picks.
BBL, BAY, and KBANK led MoM lending decline for November
The aggregate net-lending of the eight banks under coverage slipped 0.77% MoM in November (versus a mean MoM increase of 0.5% for the past five years), but was still up 2.07% YTD. The MoM slippage was due to big-ticket loan repayments by the clients of several big banks (particularly BBL). KKP, TISCO, and KTB posted the strongest MoM net-lending increases of 1.1%, 0.9%, and 0.77%, respectively. In contrast, BBL, BAY, KBANK, SCB, and TTB reported MoM net-loan declines of 3.5%, 1.0%, 0.7%, 0.33%, and 0.12%, respectively. Big banks will lead loan growth this year, supported by the domestic economic recovery.