Earnings Results

22 April 2016

Banking

Krung Thai Bank

KTB Current

Previous

Close

2016 TP

Exp Return

Anti-corrupt

CGR 2015

HOLD

BUY

17.80

19.50

+ 9.6%

4

5

Consolidated earnings BT (mn)

2014

2015

2016E

2017E

Loans (Bt bn)

1,953

2,027

2,109

2,214

11

4

4

5

59,905

65,689

67,354

69,575

9

10

3

3 34,660

Growth (%) PPOP (Bt m) Growth (%) Net profit (Bt m)

33,191

28,492

30,483

EPS (Bt)

2.37

2.04

2.18

2.48

EPS (Bt) -Full dilution

2.37

2.04

2.18

2.48

-4

-14

7

14

7.5

8.7

8.2

7.2

Growth (%) PE (x) PE (x) - Fully diluted DPS (Bt) Yield (%)

7.5

8.7

8.2

7.2

0.90

0.76

0.80

0.85

5.1

4.3

4.5

4.8

16.88

17.91

19.30

20.98

P/BV (x)

1.1

1.0

0.9

0.8

Par (Bt)

5.15

5.15

5.15

5.15

BVPS (Bt)

Source: Company data, FSS estimates

Net profit beats estimate, but asset quality risk increases 1Q16 net profit up 11.4% Q-Q, but down 4.9% Y-Y KTB's 1Q16 net profit comes in at Bt7.5bn (+11.4% Q-Q, -4.9% Y-Y). It's higher than both our estimate and street forecasts. In the January-March quarter, loan loss provision of Bt8.6bn (-2.6% Q-Q, +131% Y-Y) is higher than expected. It comprises general reserve of Bt3bn, extra reserve of Bt4bn, and reserve at its subsidiaries amounting to Bt1.6bn. However, the bank was able to control operating expense well, making it possible for cost-to-income ratio to decrease to 40% from its normal rate of 45%. Such loss is made possible by a decline in other expense, whose realization is expected to be postponed to the next quarter. Loan decreases most in banking sector; NPL surges by 18% Q-Q In 1Q16, loans amounted to about Bt2tn. It implies a loss of 1.83%, the largest the banking sector. The decrease is seen in all customer segments thanks to seasonal repayment and lower loan demand. NPL stood at Bt90bn, implying a rise of 18% Q-Q or about Bt15bn. Given that, NPL ratio increased to 3.7% from 3.2% of total loans in 4Q15. Note the higher NPL is due mostly to wholesale and large SME customers, while retail and medium- to small-sized SME customers did not give better signal from last year. This implies higher asset quality risk and should be more negative for investment in the banking sector in the next quarter. Coverage ratio decreased to 101% from 112% in 4Q15. Lower rating to HOLD from BUY Although KTB's 1Q16 net profit is higher than expected, the bank seems to face rising asset quality risk, while loan loss provision looks set to remain high throughout the year. We stand by our 2016E net profit of Bt30.5bn (+7% Y-Y). Such forecast assumes loan loss provision of Bt28bn, implying credit cost of Bt1.35%. Similarly, we stand by our 2016 TP of Bt19.5 (PBV 1x). Finally, we lower our rating on KTB to HOLD from BUY. Note the bank has announced DPS of 0.76, implying dividend yield of 4.3%. The counter will go XD on May 10, 2016.

1Q16 Earnings Results (Bt mn)

Comment 1Q16

4Q15

%Q-Q

1Q15

%Y-Y

Interest income

32,666

33,749

-3.2

33,048

-1.2

Interest expense

11,325

12,350

-8.3

13,710

-17.4

Net interest income

21,341

21,399

-0.3

19,338

10.4

Non interest income

9,382

9,241

1.5

7,749

21.1

Operating income

30,723

30,640

0.3

27,087

13.4

Operating expenses

12,464

13,370

-6.8

13,166

-5.3

PPOP

17,921

17,255

3.9

13,644

31.4

Provision charges

8,623

8,849

-2.6

3,724

131.5

Tax expense

1,775

1,382

28.4

1,978

-10.2

Net Profit

7,540

6,768

11.4

7,929

-4.9

Net interest margin

3.15%

3.22%

-0.07%

2.87%

0.28%

Operating cost/income

40.6%

43.6%

-3.07%

48.6%

-8.04%

NPL ratio 3.7% Source: Company and FSS Research

3.20%

0.50%

2.82%

0.88%



In 1Q16, loan loss provision amounted to Bt8.6bn (-2.6% Q-Q, +131% Y-Y), higher than expected. It comprises general reserve of Bt3bn, extra reserve of Bt4bn, and reserve at its subsidiaries amounting to Bt1.6bn.



NPL stood at Bt90bn. It implies a gain of 18% Q-Q or about Bt15bn. As a result, NPL ratio increased to 3.7% from 3.2% of total loans in 4Q15. The gain is due mostly to wholesale and large SME customers.



Cost-to-income ratio decreased to 40% from its normal rate of 45%. Such loss is made possible by a decline in other expense.

Analyst : Sunanta Vasapinyokul, CFA Register No.: 019459 Tel.: +662 646 9680 email: [email protected] www.fnsyrus.com 1

Finansia Syrus Securities Public Company Limited Head Office

Thaisummit Tower

Alma Link

Amarin Tower

Central Pinklao 1

999/9 The offices at Central World 18th, 25th Fl., Rama 1 Rd., Patumwan, Bangkok

1768 Thaisammit Tower Building, 5th, 31th Fl., New Petchburi Road, Bangkapi, Huaykwang, Bangkok

9th, 14th, 15th Fl., Alma Link Building 25 Soi Chidlom, Ploenchit, Lumpini, Patumwan, Bangkok

496-502 Amarin Tower 20th Floor, Pleonchit, Lumpini, Pathumwan, Bangkok

7/129-221 Central Pinklao Office Building, Room 1404, 14th Fl., Baromratchonnanee Road, Arunamarin, Bangkoknoi, Bangkok

Bangkapi

Bangna

Sindhorn 1

Sindhorn 2

Sindhorn 3

3105 N Mark Building, 3rd Floor, Room A3 R02, Ladprao Road, Klongjan, Bangkapi, Bangkok

1093 Tower 1 Office, 19th Floor, Room 1093/105 Moo 12, Bangna-Trad Road, Bangna, Bangkok

130-132 Sindhorn Building 1, 2nd Floor, Wireless Road, Lumpini, Pathumwan, Bangkok

130-132 Sindhorn Building 3, 24th Floor, Wireless Road, Lumpini, Pathumwan, Bangkok

130-132 Sindhorn Building 3, 19th Floor, Wireless Road, Lumpini, Pathumwan, Bangkok

Ladprao

Prachachuen

Rang sit

Thaisummit Tower

Rattanatibet

555 Rasa Tower 2, 11st Floor, Unit 1106, Phaholyothin Road, Chatuchak, Bangkok

105/1 B Building, 4th Floor, Thessabansongkhrao Road, Ladyao, Jutujak, Bangkok

1/832 Phaholyothin 60 Kukod, Lumlookka Pratumtanee

1768 Thaisammit Tower Building, 2nd Floor, New Petchburi Road Bangkapi, Huaykwang, Bangkok

68/127 Moo 8 Rattanatibet Road, Tumbon Banggrasor, Aumphoe Muang, Nonthaburi

Sriracha

Khonkaen 1

Khonkaen 3

Udonthani

Chiangmai 1

135/99 (G fl.) Sukumvit Road, Tumbon Sriracha Aumphoe Sriracha, Chonburi

311/16 2nd Floor, Klangmeung Road, Tumbon Nai Meung, Aumphoe Meung, Khonkaen

311/1 Khang Meung Road, Tumbon Nai Meung, Aumphoe Meung Khonkaen, Khonkaen

104/6, 2 fl., ICBC Bank Tower Udon Dusadee Road, Tumbon Mak Khaeng, Aumphoe Muang Udon Thani, Udon Thani

308 Chiang Mai Land, Chang Klan R., Chang Klan

Muang Chiangmai

Chiangmai 2

Chiangmai 3

Chiangrai

Measai

Nakornratchasima

310 Chiang Mai Land,

Maliplace Building 32/4 moo 2

Chang Klan R., Chang Klan

1 fll., B1-1, B1-2 room

Tumbon Maehia Chiangmai

119 Moo 10, Tumbon Maesai, Aumphoe Muang, Cheangrai

1242/2 A3 room, 7 fl., The Mall Ratchasima

Muang Chiangmai

353/15 Moo 4, Tumbon Rimkok Aumphoe Muang, Cheangrai

Mittraphap rood Tumbon Nai Muang Aumphoe Muang Nakornratchasima

Nakornratchasima Samutsakorn

Nakornpathom

Phuket

Hatyai 1

Hatyai 2

1045/16-17 Vichienchodok, Tumbon Mhachai, Aumphoe Meungsamutsakorn, Samutsakorn

28/16-17 Yingpao Road, Tumbon Sanamjan, Aumphoe Muang, Nakornpathom

22/18 Vanish Plaza Shopping Mall, Luangporwatchalong Road, Tumbon Talad Yai,

200/222, 200/224, 200/226 Juldis Hadyai Plaza, 2rd Floor, Building, Niphat Uthit 3 Road, Aumphoe Hadyai, Songkhla

106 Prachathipat Road, Aumphoe Hadyai, Songkhla

Hatyai 3

Krabi

Trang

Suratthani

Pattane

200/222, 200/224, 200/226 Juldis Hadyai Plaza, 2rd Floor, Building, Niphat Uthit 3 Road, Aumphoe Hadyai, Songkhla

223/20 Mharaj Road, Tumbon Paknam, Aumphoe Meung, Krabi

59/28 Huaiyod Road, Tumbon Thaptieng, Aumphoe Meungtrang, Trang

173/83-84 Moo 1 Watpho-Bangyai Road., Tumbon Makamtia, Aumphoe Mueang, Suratthani

300/69-70 Moo 4, Tumbon Rusamirae, Aumphoe Meung, Pattane

Recommendation Definitions BUY HOLD SELL TRADING BUY OVERWEIGHT NEUTRAL UNDERWEIGHT

The The The The The The The

latest close is below our target price and the estimated upside is 10% or more. latest close is below our target price and the estimated upside is 0-10%. latest close is above our target price. latest close is above our target price but the price is expected to be driven by short-term positive factors estimated return is higher than the market average. estimated return is the same as the market average. estimated return is lower than the market average

Note: The expected return may change as market risks increase or decline. DISCLAIMER: This report has been prepared by Finansia Syrus Securities Public Company Limited (FSS). The information herein has been obtained from sources believed to be reliable and accurate; however FSS makes no representation as to the accuracy and completeness of such information. Information and opinions expressed herein are subject to change without notice. FSS has no intention to solicit investors to buy or sell any security in this report. In addition, FSS does not guarantee returns nor price of the securities described in the report nor accept any liability for any loss or damage of any kind arising out of the use of such information or opinions in this report. Investors should study this report carefully in making investment decisions. All rights are reserved. This report may not be reproduced, distributed or published by any person in any manner for any purpose without permission of FSS. Investment in securities has risks. Investors are advised to consider carefully before making investment decisions. Finansia Syrus Securities Public Company Limited may act as market maker and issuer of DWs. The company may prepare the research reports on those underlying securities. Investors should carefully read the details of the derivative warrants in the prospectus before making investment decisions.

Thai Institute of Directors Association (IOD) – Corporate Governance Report Rating 2015

Sc ore Range

Rating

Desc ription

100-90

Excellent

80-89

Very Good

70-79

Good

60-69

Satisfactory

50-59

Pass

<50

no logo given

n/a

IOD (IOD Disclaimer) The Corporate Governance Report (CGR) of Thai listed Companies is based on a survey and assessment of information which companies listed on the Stock Exchange of Thailand and the Market for Alternative Investment (“listed companies”) disclose to the public. The CGR is a presentation of information from the perspective of outsiders on the standards of corporate governance of listed companies. It is not any assessment of the actual practices of the listed companies, and the CGR does not use any non-public information. The CGR is not therefore an endorsement of the practices of the listed companies. It is not a recommendation for investment in any securities of any listed companies or any recommendation whatsoever. Investors should exercise their own judgment to analyze and consider any information relating to the listed companies presented in this CGR report. No representation or warranty is made by the Institute of Directors or any of its personnel as to the completeness or accuracy of the CGR report or the information used.

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Anti-corruption Progress Indicator Level 5

Extended

Extension of the anti-corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases

Level 4

Certified

Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.)

Level 3

Established

Carrying out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes

- Level 3A

Established by Declaration of Intent

- Level 3B

Established by Internal Commitment and Policy

Level 2

Declared

Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives

Level 1

Committed

Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws

Anti-corruption Progress Indicator from Thaipat Institute (as of November 6, 2015)

KTB Krung Thai Bank - FSS

Apr 22, 2016 - FSS has no intention to solicit investors to buy or sell any security in this report. In addition, FSS ... Audit engagement by audit committee or auditors approved by the office of. SEC, and ... be in compliance with all relevant laws.

144KB Sizes 6 Downloads 317 Views

Recommend Documents

Krung Thai Bank PCL KTB
Aug 4, 2017 - Krung Thai Bank PCL offers banking and financial services to businesses ... products and services include deposit, insurance and assurance ...

Krung Thai Bank (KTB TB) - RHB Securities
Jan 25, 2016 - performance of currencies may affect the value of, or income from, the .... Foreign companies may not be subject to audit and reporting ...

Krung Thai Bank - efinanceThai
(6.7). (7.0). Source: Bloomberg, Krungsri Securities ... Source: Company data, Krungsri Securities. KTB: FY16F key financial ..... Renewable Energy, Contractor.

krung thai bank - Settrade
Sep 19, 2017 - 4. Liquidity risk: Liquidity risk arise from a mismatch of maturity of the bank's assets and liabilities. Total Interest Income. 132,525. 129,230 124,277 131,521. Total Interest Expenses. 51,657. 42,264. 37,211. 41,072. Net Interest In

krung thai bank - Settrade
Oct 24, 2017 - กําไร 3Q60 ตํ่าคาด จากการตั้งสํารองที่สูงกว่าคาด. KTB รายงานกําไรสุทธิ 3Q60 ที่ 5,872 ล้านบาท (-31% Y

Krung Thai Bank
(7.0). Source: Bloomberg, Krungsri Securities ... 2. 8 2559. KTB: 1Q16F results preview. Financial statements. 1Q15. 4Q15 ..... Renewable Energy, Contractor.

Krung Thai Bank - RHB Securities
Feb 1, 2016 - performance of currencies may affect the value of, or income from, the .... Foreign companies may not be subject to audit and reporting ...

Krung Thai Card - Settrade
Apr 18, 2018 - Source: Company data, KGI Research. Chalie Keuyen. 66.2658.8888 Ext. 8851 [email protected]. ALERT. Thailand. Krung Thai Card. (KTC.

Krung Thai Card - Settrade
Jan 18, 2018 - 18.0. 20.0. Credit card. Personal loan. Total. 34 35 38 36 37 38 41 40 41 4146 43 44 44 46. 13 15 1716 17 17. 19 19 20 20. 22 22 22 24 25.

Krung Thai Card
Aug 2, 2017 - NPL coverage สูงขึ้นได้ขนาดนี้ บริษัทต้องก าหนด credit cost ต่อปีไว้สูงถึง 880bps .... Figure 10: Credit card spending growth (KTC vs. .... Non-

Krung Thai Card - p2.isanook.com
Aug 2, 2017 - NPL coverage สูงขึ้นได้ขนาดนี้ บริษัทต้องก าหนด credit cost ต่อปีไว้สูงถึง 880bps ซึ่งหากบริษัทยังคง .... Fi

KTB
Jan 8, 2016 - รายย่อยและ SME เนื่องจากภาวะเศรษฐกิจที่ไม่เอื้ออ านวย อนึ่ง ในไตรมาส 4/58 KTB. ได้รับสินเชืà

KTB
Jan 22, 2016 - DecY12A. DecY13A. DecY14A. DecY15A. DecY16F. DecY17F. Pre¦pro. profit (Bt mn). 46,592. 54,747. 59,905. 65,689. 65,403. 67,988. Pretax profit (Bt mn). 31,429. 42,436. 41,262. 35,148. 39,919. 44,360. Net income (Bt mn). 23,566. 34,513.

KTB
Jul 6, 2016 - 0.53. 2015. 0.56. 0.60. 0.38. 0.48. 2016. 0.54. Share price chart. (20) .... com m ercial, consum er, credit card, and m ortgage loans, as w ell ..... return* over the next twelve m onths is ranked in the top 40% of K G I's coverage.

KTB
Apr 20, 2017 - Renewable Energy. 662-659-7000 ext. 5010 [email protected]. ธีระพล อุดมเวศย์. Healthcare, Tourism. 662-659-7000 ext.

FSS DW24
Apr 4, 2017 - F : DW Call Center 02-658-9915, LINE ID: @dw24, www.fnsyrus.com/dw24. DISCLAIMER: ก F ก ( ) F ก ก F F F F F /. ก F F ก F ก F F F ก F F ก F ...

FSS DW24
FSS DW24. Analyst: Natapon Khamthakrue Register No.: 026637 www.fnsyrus.com, FB: Finansia Syrus Research. Weekly Research 23/05/2560-29/05/2560). หน า 1 จาก 1. F : DW Call Center 02-658-9915, LINE ID: @dw24, www.fnsyrus.com/dw24. DISCLAI

FSS DW24
FSS DW24. Analyst: Natapon Khamthakrue Register No.: 026637 www.fnsyrus.com, FB: Finansia Syrus Research. Weekly Research 25/04/2560-2/05/2560). หน า 1 จาก 1. F : DW Call Center 02-658-9915, LINE ID: @dw24, www.fnsyrus.com/dw24. DISCLAIM

KTB - Settrade
Apr 20, 2017 - 11.85%. 10.92%. 12.26%. 12.14%. Source: Company data, Krungsri Securities. KTB: Gross NPL and NPL ratio hit the highest level in 1Q17. 68.

FSS DW24
May 30, 2017 - 10-15%Y-Y ก F 15.5% ก. 15.0% 1Q17 Supplier ก F ก BIG F. F F ก F กก BIG. CAMERA FESTIVAL 2017 10%Y-Y. ⇥. BIG ก ก ก ก Golden Cross.

FSS Daily Focus
Jun 30, 2017 - Strategy: On weakness, we recommend our investors buy the ... Although its sauce and dip business steadied well, its beverages unit.

FSS Daily Focus
Jun 13, 2017 - Top picks in June: CPF, GLOBAL, SYNEX, TACC, THANI. Fund Flow .... (Col= excluded from credit limit ; xNet= prohibit Net settlement).

FSS DW24 - Finansia Syrus
Dec 6, 2016 - ก F ก ( ) F F (Market Maker) F ก F(Derivative Warrants) ก F ก F. F ก F F ก F ก ก F ก F กF. Gearing. Implied Vol Time Decay ( ) Moneyness. 136.

FSS DW24 - Finansia Syrus
Dec 20, 2016 - ก F ก ( ) F F (Market Maker) F ก F(Derivative Warrants) ก F ก F. F ก F F ก F ก ก F ก F กF. Gearing. Implied Vol Time Decay ( ) Moneyness. 35.