The BOT looks all but certain to raise the Repo Rate by 25bps to 1.00% at its Sep 28 MPC. Several banks are likely to accelerate clearing NPLs before booking new loans in 3Q22. Our 2022 Bank coverage (eight banks) aggregate profit forecast is Bt204bn, up 14% YoY, led by lighter LLPs, a slightly fatter NIM, and loan growth. We have an OVERWEIGHT sector call. BBL and KBANK are our top picks.
BBL, KKP, and TISCO topped lending growth for August
Our Bank coverage’s (eight banks) aggregate net-lending rose by 0.27% MoM in August (versus a mean increase of 0.24% MoM for the past five years) and 2.8% YTD, supported by loan drawdowns at several big banks (particularly at KBANK and BBL). BBL, KKP, and TISCO posted the strongest MoM net-lending increases of 4.1%, 3.6%, and 3.5%, respectively, while BAY marked MoM growth of 0.1%. In contrast, KTB, KBANK, and TTB reported MoM net-loan contractions of 1.3%, 0.7%, and 0.7%, respectively. Big banks—KBANK and BBL—will lead loan growth this year, supported by the domestic economic recovery.