Bangkok Bank's earnings growth to accelerate in 2018

It will be fueled by improving loan demand, fee income, and credit cost.

As Thailand's economic recovery is gaining momentum in 2018, the operating environment becomes more favourable, such as with Bangkok Bank. The bank's earnings growth will accelerate this year, fuelled by improving loan demand, continued recovery in fee income, and easing credit cost, UOB Kay Hian reports.

Here's more form UOB Kay Hian:

Bangkok Bank revealed its 2017 financial targets, which are broadly in line with our forecasts. With the improved GDP outlook, the loan growth target for 2018 is 5-6% (2017: 3.2%). Fee income is forecast to expand 5-10% yoy, underpinned by loan-related fees, capital market fees and bancassurance fees. Net interest margin should remain relatively stable at around 2.3% as liquidity remains accommodative. With a more stable NPL trend, provisions are guided to decline to around Bt20b while cost-to-income should be kept under control at mid-40%.

Bangkok Bank’s (BBL) management has become more upbeat on Thailand’s economic outlook in 2018, forecasting a stronger GDP growth of 4.2% (2017F: 3.9%). Exports should continue to expand well, underpinned by the continued recovery in global demand while tourist arrivals will enjoy steady growth. Private investment should see a mild recovery with near-term support coming from rising capacity utilisation rates in several industries and longer-term support from the government’s strategic move to promote the next wave of private investment cycle via the Eastern Economic Corridor (EEC). Infrastructure investment is set to accelerate before the next general election. The bank is well positioned to benefit from the trend, given its robust capital position, strong asset quality and strength in corporate banking, upcountry and foreign business franchises.