Bangkok Bank shares fall on low Q4 profits

Bangkok Bank (BBL) shares dropped 3.54 per cent to 122.50 baht Friday morning after it posted lower-than-expected profits of 2.4 billion baht for the fourth quarter.

The earnings result was down 70 per cent year-on-year and 40.3 per cent quarter-on-quarter, 54 per cent below the market consensus. The bank’s 2020 full-year profits stood at 17.18 billion baht, also down 52 per cent from the previous year.

BBL stocks were traded heavily in the morning session with over 3.07 billion baht of transactions made.

The bank said the downturn in its financial performance resulted from higher loan-loss provisions and increasing operating expenses to manage the damage from the Covid-19 pandemic.

Despite the fall in share price, an analyst at KGI securities still reiterated that BBL was a top pick in the banking sector, given that it has maintained cautious provisioning policy and high coverage of non-performing loans (NPL), which would enable the bank to better balance credit cost in 2021. The target price of BBL, from KGI, is at 160 baht per share.

According to the report, the overall NPL was 104.4 billion baht, down 3 per cent from the previous quarter but up 32 per cent from the last quarter in 2019. The gross NPL trend has been stable for three straight quarters.

BBL set provisioning expenses at credit cost of 122 basis points in the fourth quarter (up from 96 points in the third quarter) as it added management overlay reserve for potential NPL risk arising from the second wave of Covid-19.

Siam Commercial bank (SCB)

Siam Commercial bank (SCB) reported its fourth quarter earnings at 4.97 billion baht or around 20 per cent down from the market consensus due to unexpectedly large provisioning expenses, which have now accelerated for two straight quarters. The bank’s full-year earnings dropped 33 per cent year-on-year to 27.2 billion baht.

However, the result did not drag its stock down as happened to BBL. SCB shares rose 2.13 per cent to 95.75 baht per share after the morning session ended, with a transaction value of 1.6 billion baht by Friday mid-day.

Kasikorn Bank (KBANK) earned further positive sentiment from its stellar earnings in the fourth quarter declared this week, leading its stock to rise 2.8 per cent to 128.50 baht per share with a transaction value of 3.68 billion baht during mid-day.

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