Here’s the bright spot in Bangkok Bank’s disappointing 4Q earnings

Its credit quality is trending upward.

It’s hard to see something good after a lackluster 4Q showing by the bank, but analysts say its credit quality may provide some good news for Bangkok Bank.

According to analysts from Maybank Kim Eng, the bank is escaping bad loans, with gross NPL falling by 3%, beating expectations of a 2% increase.

“Thanks to solid loan expansion, the NPL ratio dropped to 3.0%. This allowed BBL to reduce the credit cost by 20% QoQ to THB3.9b,” Maybank Kim Eng said.

Meanwhile, despite the poor results, Maybank Kim Eng said it is still optimistic that the bank will soon bounce back.

“We note that excluding the lower than forecast profit from asset sales, the bank’s core business was in line with our expectation. Earnings should improve markedly this year on strong loan growth, healthy profit margins, and stabilizing NPLs,” Maybank Kim Eng added.