2023-10-07 08:00:36
interest rate increase cycle It seems that the end is not yet reached following the MPC passed a unanimous resolution. To increase the policy interest rate by 0.25% per year to 2.50% from the level of 2.25% on 27 September 2023 with immediate effect, the highest in 10 years, in order to prepare for the inflation that will increase from the government’s injection of money. Make all small and large banks Gradually, they announced interest rate increases, following in close succession.
However, the period of Q3/66 has already passed with the index making a new low in 3 years, falling below the level of 1,450 points. Therefore, the bank budget that began to be announced first. It will be a pilot for the work in the second half of the year. It is expected that the announcement will begin on October 12, 2023, the first day.
Chu BBL is a profitable top pick. Q3/66 posted outstanding growth of 29.1%.
On the side, Phillip Securities (Thailand) views that the policy interest rate increase It is expected to have a positive impact on the banking group. Still giving weight “Invest more than the market”
Select BBL as the group’s top pick. It is expected to be the bank with the most outstanding YoY profit increase, with a profit of 9.9 billion baht, an increase of 29.1%, even though loans will shrink but interest income will increase significantly and Provisions decreased, but if compared QoQ, it is expected that KKP will be the most outstanding, expected to have a profit of 1.5 billion baht, an increase of 7.5% from increased interest income and decreased losses on repossessed vehicles.
Therefore, it is expected that the total Q3/66 profit of all 8 banks under the analysis of Phillip Securities (Thailand), namely BAY, BBL, KBANK, KKP, KTB, SCB, TISCO and TTB, will be 55.7 thousand. million baht, an increase of 5.8% YoY from the increase in loan interest rates causing interest income to increase. Even though it is expected that interest expenses and expenses will increase, resulting in a total profit of 175 billion baht in the first 9 months, growing 12.40% YoY.
Meanwhile, QoQ profit is expected to decline 8.1%. Even though interest income will increase, interest costs and expected increases in provisions will reduce the group’s profit.
Better budget YoY but decreased QoQ
Meanwhile, InnovationX Securities revealed that in Q3/66 the bank’s Credit Cost will increase by 0.27% YoY but decrease by 0.50% QoQ, mostly due to BBL having already set a large amount of reserves in the second half. The first year and SCB had no special provisions for one large business customer and CardX occurred once more in Q3/23.
It is expected that NPL will increase from gradually increasing the repayment rate of restructured debt. Uneven economic recovery global economic slowdown and higher loan interest rates. In addition, NIM in Q3/23 is expected to increase by 0.50% QoQ and 0.38% YoY from the increase in interest rates in August 2023 and in Q2/23.
Therefore, it is expected that the total Q3/66 profit of all 8 banks under the analysis of Innovest EX Securities, namely BBL, KTB, SCB, KBANK, BAY, TTB, TISCO and KPP, will be 598,000. million baht, decreased 1% QoQ but will increase 14% YoY. As a result, in 2023, profits are expected to grow 20%, loans will grow 4%, NIM will expand 0.40%, and credit costs will increase 0.12%. Choose BBL and KTB as Featured stocks have target prices of 210 baht and 25 baht, respectively.
The bond market is hot. drag down credit
The Research Department of CGS-CIMB Securities (Thailand) expects Q3/66 the bank will have a cost-to-income ratio of approximately 43.5%, increasing from Q2/66 at 42.9% due to business expansion. and investment in IT systems Meanwhile, loan growth is expected to decrease by 0.4% YoY but increase by 0.1% QoQ as a result of large business customers repaying debt. And some customers turn to raising funds through the bond market.
It is seen that NIM will increase by 0.80% QoQ to 3.49% from the gradual increase in loan interest rates. Reflecting the policy interest rate increase of 0.50% in June 2023, while Thai banks increased interest rates on all benchmark loans at the rate of 0.20-0.25% in Q3/66 and expected to continue increasing interest rates in Q4/66 following The Bank of Thailand raised policy interest rates on 27 Sep. 2023.
Therefore, it is expected that the Q3/66 total profits of all 7 banks under analysis by CGS-CIMB Securities (Thailand) consisting of BBL, KBANK, SCB, KTB, TTB, TISCO and KKP will At 52.4 billion baht, an increase of 0.4% QoQ and 18% YoY, select BBL and SCB as top pick stocks, giving target prices of 193 baht and 145 baht, respectively.
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