Morgan Stanley noted positivity for Bangkok Bank Public Company Limited (SET: BBL), citing strong fundamentals while pointing to some near-term pressure on second-quarter 2025 pre-tax profit due to higher loan-loss provisions and subdued fee income.
BBL’s net interest income (NII) outperformed estimates, even as the net interest margin (NIM) declined by 8 basis points quarter-on-quarter to 2.81%. The company has been effective in managing funding costs in a lower interest rate environment.
However, fee-based income softened, weighed by reduced revenues from loan-related activity, bancassurance, and mutual funds, though other non-interest lines remained resilient.
The brokerage firm stated that BBL’s expense management was positive, but the rise in loan loss provisions reflected ongoing macroeconomic challenges. Non-performing loans (NPLs) increased 7.9% from the previous quarter, lifting the NPL ratio to 3.2%.
Pre-tax profit missed Morgan Stanley and consensus forecasts by 3% and 4% respectively, but net profit after tax (NPAT) came in ahead of expectations thanks to a lower tax rate. Morgan Stanley highlighted BBL’s robust capital position as another key strength.
Following these, the analyst reiterates an ‘Overweight’ rating on BBL and sets a price target for the company at THB 187 per share.
