Date: 24 October 2024
Broker: UOB Kay Hian

Overview

Bangkok Bank (BBL) reported a net profit of Bt12.5 billion for the third quarter of 2024, which represents a 10% increase year-on-year and a 6% increase quarter-on-quarter. The results exceeded both UOB Kay Hian’s and consensus expectations by 11% and 9%, respectively.

Financial Performance

• Net Profit: Bt12.5 billion
• Year-on-Year Change: +10%
• Quarter-on-Quarter Change: +6%
• PPOP: Grew by 3% year-on-year but declined by 1% quarter-on-quarter.

Impact of Rate Cuts

The 25 basis point rate cut has pressured BBL’s net profit by approximately 6.7% and decreased its Net Interest Margin (NIM) by 5 basis points. With the highest corporate loan exposure at 44%, BBL is particularly affected by the rate cut.

Strategic Outlook

Due to the pressures from the recent rate cut and a lack of immediate catalysts for growth, UOB Kay Hian has downgraded BBL’s rating to HOLD. The bank is expected to face ongoing challenges in maintaining profit margins in the current economic environment.

Conclusion

BBL continues to demonstrate a solid financial performance despite external pressures. The bank’s strategic adjustments and proactive management will be crucial as it navigates the challenges posed by fluctuating interest rates and market conditions.