As Kasikorn Securities (KS) attended an analyst meeting with Bangkok Bank Public Company Limited (SET: BBL), the brokerage expressed a neutral view, with management maintaining the previous financial targets for 2026.
Kasikorn noted that, in the first quarter of 2026, BBL’s loan growth was solid, primarily driven by the large corporate segment, and the bank reiterated its target for loan growth at 2-3% for the full year.
Net interest margin (NIM) is anticipated to decline slightly in the second quarter, before stabilizing in the second half of 2026. This outlook is supported by a reduction in deposit rates, while there may be additional pressure in the second quarter stemming from client assistance measures.
BBL has reaffirmed its target for fee income growth at a low single-digit rate, with expansion primarily led by the wealth and bancassurance sectors.
For operating expenses, the bank expects a year-on-year decrease in total amount, maintaining the cost-to-income ratio at 46-49%. In the short term, however, management cautioned that the cost-to-income ratio typically rises in the second and fourth quarters of the year.
There has been an increase in non-performing loans (NPLs), with the bank proactively front-loading these exposures. Management expects to see some impact on NPLs from the ongoing war in the Middle East over the remainder of the year and forecasts quarterly NPL levels within a range of 3.0-3.5%.
Credit cost remained elevated at 1.39% in the first quarter, also due to front-loading and the establishment of management overlay, particularly in response to risks associated with the U.S.-Iran conflict. However, the 2026 credit cost target remains at 1%.
Following these, Kasikorn projects that BBL’s net profit for the second quarter of 2026 will remain flat quarter-on-quarter. This is attributable to lower provisioning but offset by higher operating expenses and continued pressure on the NIM.
