KGI Sec. Favor BBL-KTB for Their Continued Resilience amid Uneven Economic Recovery

KGI Securities said that despite the uneven economic recovery, customers in the mid-to-high segments are seeing recoveries far better than those in the low-end segment, allowing banks with high exposure to wholesale business, such as Bangkok Bank and Krungthai Bank, to have a more resilient outlook than others.

Therefore, KGI favors BBL and KTB due to their more prudent outlook and reduced risk of credit cost, and the Thai banking sector as a whole remains at “Overweight” rating, as it is  gaining incremental revenue in the rate hike cycle.

All in loans fell slightly by 0.8% MoM and +2% YTD. By bank, BBL slowed the most at 3.5% MoM, while KTB turned to growth of +1% MoM. Meanwhile, loans were nearly flat MoM for Siam Commercial Bank (SET:SCB), Kasikornbank (SET:KBANK), and TMBThanachart Bank (SET:TTB). In contrast, lending at small banks grew robustly at both Kiatnakin Phatra Bank (SET:KKP) and Tisco Financial Group (SET:TISCO). TISCO grew more loans in SME and floor plan (loans for car dealers), and hire-purchase following the growth in domestic car sales. 

BBL’s lending has grown the most this year among big banks, growing +5% YTD (excluding bank operation in Indonesia), followed by SCB +2.3%, and KBANK +1.6%. However, TISCO has been grow more heavily over the past 34 months with loan growth of +7% YTD, which contrasts to KKP that turned to slow loan growth over the past 34 months with loan growth of +20% YTD.