Equity Analysis /

Thailand: Banks – Robust earnings growth ahead

  • 4Q22 aggregate profit missed our estimate

  • Aggregate lending rose 2.6% YoY but dipped 0.6% QoQ

  • NPLs down 5.0% YoY, but credit-cost peg up 15bps YoY

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
25 January 2023

Loan growth, fatter NIMs (enabled by higher interest rates), and lighter LLPs will drive profits this year. We have an OVERWEIGHT sector call. BBL and TISCO are our top picks.

4Q22 aggregate profit missed our estimate

The eight banks under coverage posted aggregate 4Q22 earnings of Bt40.5bn, down by 4% YoY and 23% QoQ. The number was 23% below our projection and 21% behind the consensus. The profits of BBL, KBANK, KKP, and SCB missed our expectations, mostly because of lower non-NII and heavier OPEX and LLPs than assumed. In contrast, the numbers of BAY, KTB, TISCO, and TTB were more-or-less in line with our expectations. Hence, aggregate Bank coverage 2022 earnings totaled Bt196.1bn, up 9.5% YoY.