Tisco Securities picked three banking stocks as its top picks for potential outstanding performers in 2Q22.
The securities company stated that all seven major banks in Thailand under its coverage should have a combined bottomline in 2Q22F at 48.5 billion baht, flat YoY and -3% QoQ. Earnings drivers in this quarter are a gradual increase in interest income and lower credit cost.
However, excluding an extraordinary item from Bank of Ayudhya Public Company Limited (SET: BAY) that raised its earnings base in the second quarter last year from the IPO of TIDLOR, core profit should increase by 20% YoY.
Tisco Securities picked Bangkok Bank Public Company Limited (SET: BBL), Kasikornbank Public Company Limited (SET: KBANK) and SCB X Public Company Limited (SET: SCB) as its top picks, seeing higher profit growth potential than other banking stocks both in YoY and QoQ.
Tisco Securities expected 2Q22 net profit for BBL to grow 16.7% YoY and 4.2% QoQ, giving a target price at THB173.00 per share.
KBANK’s net profit in 2Q22 was expected to grow 32.5% YoY and 5.1% QoQ with a target price from Tisco Securities at THB178.00 per share.
Lastly, the securities company estimated SCB to record 17.2% YoY and 1.3% QoQ net profit growth in 2Q22 with a target price at THB167.00 per share.
Nevertheless, Tisco Securities stated that the overall earnings in 2Q was weaker than anticipated due to fluctuation of asset values and rising inflation, resulting in lower revenue from the business related to capital investment. Meanwhile, the pressure from inflation could limit household spending, which could impact bancassurance.
