Bangkok Bank Public Company Limited (SET: BBL) had just released its 1Q24 earnings today with a slight increase from last year, but nearly 19% increase from the previous quarter. However, the item that caught investors’ eyes the most is an increase of Non-performing loan (Gross NPL) from Baht 85,955 million at the end of December 2023 to Baht 93,949 million at the end of March 2024.
BBL is said to be one of the major creditors for the troubling Italian-Thai Development Public Company Limited (SET: ITD) that has been facing liquidity crunch as of late. Investors were concerned that bad debt from ITD could fall to tier 3, which would be considered a non-performing loan, and that BBL would be required to set aside higher provision.
However, the rise of about Baht 8,000 million in BBL’s NPL in the first quarter was partially from a construction sector, according to a comment from CGS International Securities (Thailand) (CGSI), in which a part of them are from the manufacturing sector.
CGSI wrote in a note stating that for ITD case, BBL claimed that all of this loans are now under NPLs (from qualitative downgrade) with sufficient provisions backup.
Due to this statement, CGSI believes that the overhang from ITD to BBL is now marginalised.
BBL added that it hopes that once the budget disbursement is out, the liquidity situation for ITD would be better and could improve loan staging soon.
