Date of Report

October 22, 2024

Broker Name

UOB Kay Hian

Company Overview

Kasikorn Bank (KBANK) is the fourth largest commercial bank in Thailand, holding a 14% share of the credit market. The bank emphasizes SME lending, which comprises 34% of its loan portfolio.

Stock Data

• Share Price: Bt151.50
• Target Price: Bt190.00
• Market Cap: Bt358,953.1 million (US$10,839.6 million)
• Shares Issued: 2,369.3 million
• 3-Month Average Daily Turnover: US$57.4 million
• GICS Sector: Financials
• Bloomberg Ticker: KBANK TB

Price Performance

• 52-Week High/Low: Bt159.00 / Bt118.50
• Performance Over Time:
  • 1 Month: -3.5%
  • 3 Months: +18.4%
  • 6 Months: +22.2%
  • 1 Year: +17.4%
  • Year-to-Date: +12.2%

Financial Results

• 3Q24 Earnings: Bt12 billion (up 6% YoY, down 5% QoQ)
• Pre-Provision Operating Profit (PPOP): Flat YoY, down 5% QoQ
• NPL Ratio: 3.20% in 9M24, within the target of less than 3.25%
• Loan Growth: -2.28% in 9M24, compared to the target of 3-5%
• Credit Cost: Reported at 190 basis points in 9M24, within the target range of 175-195 basis points.

Financial Targets vs. Actual

• NIM: Remained at 3.66% (Target: 3.66%)
• Loan Growth Target: 3-5% (Actual: -2.28% YTD)
• Net Fee Income Growth Target: Mid to High-Single Digit (Actual: 4.98%)
• Cost to Income Ratio Target: Low to Mid-40s (Actual: 42.95%)
• NPL Ratio Target: < 3.25% (Actual: 3.20%)

Key Financials

• Net Interest Income (2023): Bt183,608 million
• Net Interest Income (2024F): Bt190,182 million
• Net Profit (2024F): Bt49,408 million
• EPS (2024F): Bt20.9
• PE Ratio (2024F): 7.3
• Dividend Yield (2024F): 5.4%

Outlook and Recommendations

• The bank maintains its 2024 financial targets, except for loan growth, which is being reassessed.
• Management anticipates another policy rate cut next year.
• KBANK is focused on cleaning its balance sheet and improving asset quality.
• The bank expects credit costs to normalize to 140-160 basis points in 2025.
• Analyst recommendation: Maintain BUY with an unchanged target price of Bt190.00, based on the Gordon Growth Model (cost of equity: 11%, long-term growth: 2%).

Environmental, Social, Governance (ESG)

• CG Report: 5
• SET ESG Rating: AAA
• Environmental Commitment: Targeting net zero emissions in operations by 2030.
• Social Responsibility: Focus on financial inclusion and customer data security.
• Governance: Adherence to strong corporate governance practices.

Key Risks

• Potential for policy rate cuts impacting net profit and net interest margin.
• Continuous focus on asset quality and strict lending policies to navigate economic uncertainties.