As most of Thailand’s banks reported improved performance in 1Q22, Maybank Securities (Thailand) (MST) reaffirmed its positive sector view, forecasting the sector to outperform the SET.
Sector earnings rose 13% YoY and 24% QoQ to THB44.3 billion due to lower credit cost in 1Q22. Kiatnakin Phatra Bank Plc. (SET: KKP) and Krung Thai Bank Plc. (SET: KTB) showed impressive earnings growth of 41% and 57% YoY, respectively, with improving asset quality and lower credit cost. Sector PPoP was relatively flat YoY while KKP and KTB reported 20% and 9% YoY growth, thanks to strong loan growth and lower cost-to-income ratios. Sector loans grew 6.7% YoY and 0.9% QoQ. NPL ratio fell 4bps QoQ to 4.0%, credit cost fell to 1.21% in 1Q22 from 1.87%/1.55% in FY20/21.
Following an impressive earnings growth, KTB is now added to the top BUYs along with Kasikornbank Plc. (SET: KBANK) and KKP.
MST sees a buying opportunity in KTB after it posted 1Q22 net profit of THB8.8 billion, jumped 57% YoY and 78% QoQ, thanks to lower opex and credit cost likely to stay at 1.0% in FY22E from 1.35-2.0% in FY20-21. PPoP also rose 9% YoY and 15% QoQ. MST raised its FY22-23E earnings by 26-27% on lower credit cost and expected earnings to grow 35% YoY vs the sector average of 14% this year.
|Kasikornbank (SET: KBANK)||BUY||THB185.00|
|Siam Commercial Bank (SET: SCB)||BUY||THB140.00|
|Bangkok Bank (SET: BBL)||BUY||THB165.00|
|Krung Thai Bank (SET: KTB)||BUY||THB18.00|
|TMBThanachart Bank (SET: TTB)||HOLD||THB1.45|
|TISCO Financial (SET: TISCO)||BUY||THB110.00|
|Kiatnakin Bank (SET: KKP)||BUY||THB88.00|