Equity Analysis /

Thailand: Bank - Robust earnings growth with cheap valuations for 2022-23

  • 3Q22 aggregate profit beat our estimate

  • NPLs down by 4.7% QoQ

  • 4Q22 coverage earnings should rise 25% YoY (flattish QoQ)

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
26 October 2022

Loan growth, fatter NIMs, and lighter LLPs will drive profits this year. Moreover, Thai banks will benefit from the tailwinds of the ongoing Thai economic recovery and higher interest rates in 2023, while valuations are cheap. We maintain an OVERWEIGHT sector call.

3Q22 aggregate profit beat our estimate

The eight banks under coverage posted aggregate 3Q22 earnings of Bt52.6bn, up by 28% YoY and 3% QoQ. The aggregate number was 6% above our projection and 2% ahead of the consensus. KBANK, BBL, SCB, and TISCO were in line with our forecasts. The profits of BAY, KKP, KTB, and TTB beat our expectations, mostly because of higher NIM and lighter LLPs than assumed.