Maybank Securities (Thailand) has provided an update on AEON Thana Sinsap (Thailand) PCL (SET: AEONTS), reporting that the company’s fiscal second quarter (June to August 2025) earnings and asset quality were broadly in line with expectations. AEONTS posted a net profit of THB 792 million, reflecting a 4% year-on-year decline due to a contraction in net interest margin (NIM). However, the result was 3% higher quarter-on-quarter, supported by stronger non-interest income (non-NII).
The loan portfolio saw a 3% drop YoY and a 1% decline QoQ, primarily driven by decreases in both credit card and personal loan segments. Consequently, net interest income contracted by 5% YoY. Despite this, non-NII gained 11% QoQ (remaining flat YoY), aided by increased bad debt recoveries and gains from non-performing loan (NPL) sales.
Operational costs were well-managed, with operating expenses (OPEX) down 5% YoY and 3% QoQ due to lower marketing expenses, improving the cost-to-income ratio by 40 basis points YoY to 41.0% in 2QFY26.
Asset quality showed some deterioration as new NPL formation rose to 7.4%, up from 6.6% in the previous quarter, and the NPL ratio edged up 10 basis points QoQ to 5.2%. The company set aside THB 1.9 billion in provisions, down 4% YoY but up 8% QoQ, translating to an 8.6% credit cost.
AEONTS also announced an interim dividend of THB2.55 per share for its first half performance, with the XD date set for 21 October.
Maybank Securities expects a neutral market reaction to the results and plans to provide further insights after AEONTS’ analyst meeting on 9 October. The firm maintained a “BUY” recommendation with a target price at THB 120 per share.