Tisco Financial Group Public Company Limited (SET: TISCO) has announced its 2021 earnings earlier this morning, showing an increase of net profit by nearly 12% compared to 2020.
TISCO’s net profit for the year 2021 was reported at THB6,781.47 million, increased by 717.99 million baht or 11.8% (YoY), primarily contributed by a growth in capital market businesses especially asset management business, the recognition of gain on investment and lower expected credit loss (ECL).
The net profit surprised the market as the consensus from Refinitiv estimated the bank to record 6,577 million baht of net profit for the year, which is lower than the actual number reported by TISCO.
Land and Houses Securities (LHS) stated that the earnings result of TISCO is higher than expected and the bank is still ranked at one of the five top picks in the banking sector with the highest potential of generating income. Meanwhile, TISCO has strong institutional funds and the highest provision in the banking system.
LHS expected a THB7 per share dividend payout from TISCO for its operation in 2021, reflecting a dividend yield of 7.1%. TISCO normally announces its dividend payout in January and set the ex-dividend date in April.
LHS gave a “BUY” recommendation on TISCO with a target price at THB115 per share.
FSS International Investment Advisory (FSSIA) also gave a “BUY” recommendation on TISCO with a target price at THB110 as 4Q21 results beat expectations with strong fee income and healthy NPLs.
FSSIA pointed out two positive factors for TISCO. First, the bank reported a solid asset management fee income thanks to new fund issuances, and its strong fund performance. Second, TISCO had a very healthy asset quality with a drop in its non-performing loans (NPLs) by 19% QoQ thanks to the efficient asset quality control and the long term debt restructuring program. Regarding its loan volume, it continued to drop by 0.7% QoQ (-9.7% YoY). However, a decline rate was better than in 3Q21, which was at 4.5% QoQ, as the bank started to resume its auto title loan expansion.
FSSIA expected TISCO’s 2021 dividend payment of THB7.0 per share, implying a dividend yield of 7.2%.
In addition, FSSIA stated that it believes TISCO has plenty of room to release its provisions in 2022. Also, it expects the bank to gradually resume its auto title loans expansion. Thus, FSSIA expects a slight increase in its loan volume with an improvement in its loan yield in 2022. All in all, net profit is expected to continue increasing at a moderate rate in 2022.
