Departure of Suzuki Thailand Hits Kiatnakin Phatra the Hardest

Shares of Kiatnakin Phatra Bank Public Company Limited witnessed a larger decline yesterday compared to other Thai commercial banking stocks. This drop comes amidst growing apprehensions surrounding Suzuki’s departure from Thailand, with KKP being the primary lender for Suzuki’s title loans.

The Thai stock market experienced a 1% decrease yesterday amid uncertainties related to various political issues, including the Lese Majeste charges against Thaksin Shinawatra, the removal of Srettha Thavisin, and the dissolution of the Move Forward Party. The main index fell below the 1,320 resistance level, closing at 1,318 points.

In the midst of the market volatility, KKP saw a 2.5% decline while other commercial banks had mixed performance, with losses of less than 1%. The dip in KKP’s share price can be attributed to Suzuki Motor Corporation’s announcement of its closure in Thailand and its plan to import models from other ASEAN countries instead.

Thanachart Securities highlighted that Suzuki’s exit could negatively impact KKP, given the bank’s significant exposure through title loans for Suzuki vehicles. This situation may lead to increased pressure on the bank’s liquidation of repossessed cars, raising concerns about asset quality.

Although Suzuki’s manufacturing facility in Thailand is situated on industrial land owned and managed by WHA Corporation Public Company Limited (SET: WHA), Thanachart Securities believes that the revenue side may not be severely affected, as Suzuki is likely to secure alternative buyers for the plant.