BBL’s 4Q23 Earnings Miss Expectations by 15% as Loans from Manufacturing and Commercial Sector Slow Down

Bangkok Bank Public Company Limited (SET: BBL) has announced its 2023 consolidated financial statement through the Stock Exchange of Thailand as follows;

Quarter 2023 2022
Net Profit (Loss)
Million Baht
41,635.52 29,305.59
Earning Per Share
21.8100 15.3500
% Change 42.07

BBL reported a net profit of Baht 41,636 million in 2023, an increase of 42.1 percent from the previous year due to an increase of 28.0% in net interest income as yields on earning assets rose in line with the interest rate environments. 

Despite an increase in net profit for the year, its earnings in the fourth quarter at Baht 8,863 million, which increased 17.1% was surprisingly lower than LSEG’s consensus by 14.37% for an estimate of Baht 10,181 million.

Cost to income ratio in the fourth quarter rose 4.3% YoY to 56.0%. Operating expenses increased by 23.9 percent. In 2023, operating expenses were Baht 81,775 million, an increase of 18.5 percent from last year, in line with an increase in economic activities and partly from expenses for operational efficiency improvement. 

Meanwhile, net interest income in the fourth quarter of 2023 amounted to Baht 35,165 million,  an increase of 3.0 percent from the previous quarter and 15.5 percent from the same quarter last year. In 2023, net interest income amounted to Baht 130,860 million, an increase of 28.0 percent from the rise in yields on earning assets following the interest rates trend. This was offset by a gradual increase in the cost of deposits from rising deposit interest rates and the resumption of the FIDF fee to the normal rate of 0.46 percent at the beginning of 2023. The net interest margin stood at 3.02 percent.

As of December 31, 2023, loans amounted to Baht 2,671,964 million, decreasing from the end of the previous quarter. Compared with the end of last year, loans were at a similar level as corporate loans increased while commercial and business loans declined. 

As part of its continuous prudent management, the Bank’s expected credit losses in the fourth quarter of 2023 declined by 18.1 percent from the previous quarter, resulting in the expected credit losses for the year 2023 of Baht 33,666 million, a similar level to last year. 

At the end of December 2023, the Bank’s total loans amounted to Baht 2,671,964 million, a similar level to the end of last year. Corporate loans increased while commercial and business loans declined. The non-performing loan to total loans ratio remained manageable at 2.7 percent. Under the Bank’s continuous prudent management approach, the ratio of the allowance for expected credit losses to non-performing loans remained strong at 314.7 percent.