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Bangkok Bank
KGI Securities (Thailand) has maintained its "outperform" recommendation on Bangkok Bank shares, with a target price of Bt136 apiece for this year.
The broker expect the bank's first-quarter earnings to total Bt5.3 billion, up 3.7 per cent year on year, due to a lower effective tax rate. The quarter-on-quarter improvement should not be a surprise, due to the absence of a huge provision in the last year's fourth quarter.Key factors affecting the first-quarter net profit are the bank's net-interest margin (NIM) narrowing 13.8 basis points from the previous quarter to 3.13 per cent and non-operating non-interest income expected to decline significantly, due to an absence of extraordinary gains from the divestment of Bumrungrad Hospital recorded in last year's first quarter. While interest rates are on a declining trend, Bangkok Bank should be one of the few banks under the broker's coverage that is poised to see NIM expanding into the second quarter. This is because the bank has lowered its lending rate at a slower pace than its peers, while its funding cost should continue to decline due to repricing of some fixed-deposit accounts for which Bangkok Bank had cut the rates during this year's first quarter. Another reason is the expiration of a high-cost special deposit programme. One of Bangkok Bank's main focuses this year is on improving its asset quality. The bank has targeted cutting its non-performing-loan ratio to below 5 per cent this year, from 9.3 per cent last year.
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