Thai banking index (BANK) rose 1.88 points or 0.45%, to 422.88 points in early trade Monday, with a total trading value of THB4,895 million.
The share price of Krung Thai Bank Public Company Limited (SET: KTB) rose THB0.40/share or 2.96% to THB13.90/share, with a trading value of THB383 million.
The share price of Bangkok Bank Public Company Limited (SET: BBL) rose THB2.00/share or 1.61% to THB126.50/share, with a trading value of THB737 million.
The share price of Kasikornbank Public Company Limited (SET: KBANK) rose THB1.00/share or 0.70% to THB143.50/share, with a trading value of THB2,307 million.
The share price of The Siam Commercial Bank Public Company Limited (SET: SCB) rose THB1.00/share or 0.80% to THB125.50/share, with a trading value of THB1,032 million.
Maybank Securities (Thailand) (MST) maintains a POSITIVE view on Thailand banks, citing that re-opening of the economy and rising vaccination rate should underpin increased consumer confidence. KBANK remains MST’s Top Pick and changed another Top Pick to KKP from TTB, as it’s a laggard play and a beneficiary of economic recovery and a strong capital market.
MST expects seven banks under its coverage (incl. SCB, KBANK, BBL, KTB, TTB, TISCO and KKP) to report 4Q21E combined earnings of THB34 billion, up 22% YoY (flat QoQ) due to lower credit cost (except for KBANK) and opex. BBL is likely to report the strongest EPS growth of 195% YoY due to high integration cost in 4Q20. Loans likely grew QoQ due to seasonal factors of high demand for working capital. NIM should have declined due to the restructuring of long-term debts. On a positive note, PPoP likely grew 9% YoY in 4Q21E, led by BBL (lower opex) and KBANK (higher NII).
Furthermore, MST expects the banking sector to outperform the SET in 2022 as improving earnings and ROE due to lower credit cost will be sufficient catalysts to lift valuation multiples from the current low level (0.7x P/BV). Sector NIM (minus credit cost) is likely to increase further from 1.13% in 2020 to 1.3-1.4% in FY21-22. The earnings recovery should drive the sector ROE to rise from 5.9% in FY20 to 7-8% for FY21-22E.
