Krung Thai Bank net profit predicted to soar 48% to THB9.5b in 3Q

Loan growth set to impress.

Maybank Kim Eng estimates Krung Thai Bank's 3Q13F net profit at THB9.5b, up 48% QoQ and 6% YoY with loan growth at 3.0% QoQ (11.1% YTD), driven by the corporate, SME and retail divisions. NIM will be flat QoQ and fee income will continue growing. With THB730m in Vayupak dividends, non-NII will jump strongly in 3Q13F. Credit costs will return to normal after the extra provisioning in 2Q13. 

Here's more from Maybank Kim Eng:

Positive growth momentum. Despite a slowing economy, KTB’s loan growth momentum has remained strong in all segments. The government’s THB2t loan bill will drive loan demand for investment (both private and public) from next year onward.

No concerns on asset quality. NPLs will continue to decline, with no current concerns, as KTB has very little exposure to auto hire purchase loans, while all non-secured personal loans were to public servants.

SME and corporate clients still have the ability to repay debt with ease. With regard to the Sahafarm case, management has the required provision already in place. We expect KTB to set an extra reserve once again in 4Q13F in order to strengthen its balance sheet, and have factored this into our projections.

Strong earnings growth. Should the 3Q13F results be in line with our projections, KTB’s 9M13 profit will make up 80% of our full-year estimates. However, we expect 4Q13F earnings to contract to THB6.0b on extra provisioning. Net profit growth is forecast at 29.4% this year (+9% EPS).

Over the long term, we still believe KTB will be the prime beneficiary of the government’s mega investments. We forecast its 3-year net profit CAGR at 24.5%, driving ROEs to 19% in 2015F.