2Q15 earnings in line
Bangkok Bank Outperform (15E TP Bt192.00)
Earnings Review
Close Bt173.00
Banking July 22, 2015
Beat forecast/Below forecast/In line
2Q15 earnings in line
FY15
FY16
Consensus EPS (Bt)
18.426
20.038
KT ZMICO vs. consensus Share data
‐3.0%
‐2.5%
Reuters / Bloomberg
BBL.BK/BBL TB
Paid‐up Shares (m)
1,908.84
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
330.00/9,589.00
Foreign limit / actual (%)
25.00/33.98
52 week High / Low (Bt)
216.00/170.50
Avg. daily T/O (shares 000)
4,907.00
NVDR (%)
32.20
Estimated free float (%)
97.47
Beta
0.70
URL
www.bangkokbank.com
CGR
Cheap valuations and solid balance sheet are main appeals We maintain an Outperform rating for BBL as we see its cheap valuations (with 2015E P/BV of just 0.98x and the current P/BV getting near its low band level, see figure 2) and its more solid reserve cushion vs. peers remaining BBL’s main price catalysts and support. 2Q15 net profit in line with our forecast and the street BBL’s 2Q15 net profit (NP) of Bt8.0bn (‐11% YoY, ‐15% QoQ) was quite in line with our forecast of Bt8.2bn and the street estimate of Bt8.4bn. 2Q15 net profit down 11% YoY and 15% QoQ The main reasons for the NP drop were NIM contraction and a higher provision YoY. Meanwhile, non‐interest income still grew favorably by 22% YoY and 5% QoQ boosted mainly by 1) the booking of huge investment gain of Bt2.3bn in 2Q15 and 2) higher gain on trading and FX transactions (+33% YoY, +12% QoQ), with both being ahead of our forecasts. Following the large investment gain, BBL set a higher provision in 2Q15 at 65 bps vs. its 55 bps guidance (~Bt10bn) for 2015E. Asset quality weakened QoQ but new NPL formation rate declined QoQ The bank’s NPLs increased sharply by 16% QoQ to 2.5% of loans from 2.2% in 1Q15 partly because the bank rarely did any loan write‐offs in 2Q15. However, we saw some positives in 2Q15 as its special mention loan ratio dropped to its normal level of 2.25% of loans in 2Q15 vs. the hike to 3.1% in 1Q15. We still expect BBL to be able to handle its asset quality and the macro headwinds efficiently given its prudent risk management and solid reserve position vs. peers. Maintain earnings forecasts The 1H15 NP accounted for 51% of our FY15 NP; thus, we maintain our forecasts. Although we see risk of higher provisioning vs. our current forecast of Bt10bn for 2015E, higher‐than‐expected investment gain as well as gain on trading and FX transactions could largely help to offset this negative. Financials and Valuation FY Ended 31 Dec
2013
2014
2015E
2016E
2017E
PPOP (Btm)
36,085
34,616
33,987
38,132
43,040
Net profit (Btm)
35,906
36,332
34,131
37,276
42,111
18.81
19.03
17.88
19.53
22.06
EPS growth (%)
13%
1%
‐6%
9%
13%
Book value (Bt)
206.48
EPS (Bt)
155.03
169.47
176.93
190.44
Prapharas Nonthapiboon
Dividend (Bt)
6.50
6.50
6.50
6.50
7.50
Analyst, no 17836
FY Ended 31 Dec
2013
2014
2015E
2016E
2017E
PER (X)
9.20
9.09
9.68
8.86
7.84
[email protected] 66 (0) 2695‐5872
PBV (X)
1.12
1.02
0.98
0.91
0.84
Dividend yield (%)
3.76
3.76
3.76
3.76
4.34
ROE (%)
13%
12%
10%
11%
11%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2Q15 net profit down 11% YoY and 15% QoQ The main reasons for the NP drop were 1) NIM contraction (by ~45 bps YoY and 19 bps QoQ) on the rate cut impact given its plentiful liquidity position as well as from its weaker asset quality; and 2) higher provision YoY. Meanwhile, loan growth was quite slow at just +1% YoY and QoQ. Non‐interest income still grew favorably by 22% YoY and 5% QoQ. This was mainly boosted by 1) the booking of huge investment gain of Bt2.3bn in 2Q15 (including gain from the sale of the IRPC stake) vs. the gain of Bt499mn in 2Q14 and Bt1.2bn in 1Q15; 2) higher gain on trading and FX transactions (+33% YoY, +12% QoQ), with both coming out ahead of our forecasts. Following the large investment gain, the bank set a higher provision in 2Q15 at 65 bps vs. its latest guidance of 55 bps (~Bt10bn) for 2015E. Asset quality weakened QoQ but new NPL formation rate declined QoQ The bank’s NPLs increased sharply by 16% QoQ to 2.5% of loans from 2.2% in 1Q15 following the weak economy and because the bank rarely did any loan write‐offs in 2Q15. The higher NPLs were due largely to higher NPLs from a few corporate clients followed by smaller size SMEs, as well as from the bank’s qualitative NPL assessment. However, we saw some positives in 2Q15 as its special mention loan ratio dropped to the normal level of 2.25% of loans in 2Q15 vs. the hike to 3.1% in 1Q15. BBL still expects to be able to maintain its NPL ratio in the range of 2.4‐2.6% at yearend as the bank is normally better at resolving its NPLs in 4Q through debt restructuring and loan write‐offs. We therefore still expect BBL to be able to handle its asset quality and the macro headwinds efficiently given its prudent risk management and solid reserve position. The higher NPLs QoQ resulted in a lower loan loss reserve to NPLs ratio to 170% in 2Q15 from 190% and a lower reserve to the BoT’s required reserve to 242% in 2Q15 from 267%. However, these ratios remain solid and are the highest in the banking sector when compared with the sector averages of ~110% and ~150% for 2Q15, respectively. Figure 1: 2Q15 earnings results Statement of comprehensive income (Btmn) Fiscal Year-Ended Dec.
2Q14
1Q15
2Q15 % YoY % QoQ
1H14
1H15 % YoY
2015E
% YoY % 1H to 15E
Net Interest Income
14,962
14,235
13,218
-12%
-7% 29,028
27,452
-5%
57,397
-3%
48%
Non Interest Income
9,283
10,813
11,328
22%
5% 17,954
22,141
23%
39,637
12%
56%
Operating Income
24,245
25,048
24,545
1%
-2% 46,983
49,593
6%
97,034
3%
51%
Operating Expenses
10,961
10,376
11,589
6%
12% 20,373
21,965
8%
44,376
3%
49%
Operating Profit-pre tax
10,698
11,936
8,937
-16%
-25% 22,457
20,872
-7%
42,246
-2%
49%
Provision Expenses (Reversal)
2,331
2,980
2,922
25%
-2%
4,435
5,901
33%
10,086
16%
59%
Tax expenses (Reversal)
1,885
2,235
1,942
3%
-13%
4,107
4,177
2%
8,259
-4%
51%
Minority Interest
NM
59%
Net Profit
9,029
(38)
9,407
8,035
-11%
-15% 17,994
17,442
-3%
34,131
-6%
51%
PPOP-post tax
8,813
9,700
6,995
-21%
-28% 18,350
16,695
-9%
33,987
-2%
49%
4.73
4.93
4.21
-11%
-15%
9.14
-3%
17.88
-6%
51%
EPS (Bt)
Key Statistics & Ratios
2Q14
Gross NPLs (Btmn)
45,007
Gross NPLs/Loans
(50)
1Q15 47,473
(58)
2Q15 55,126
NM
NM
(74)
9.43 1H14 45,007
1H15 55,126
NM
(183)
2015E 56,213
2.26%
2.20%
2.50%
216.0%
189.9%
170.4%
Tier I to Risk Assets
14.8%
15.2%
15.5%
14.8%
15.9%
14.8%
C apital Adequacy Ratio
17.2%
17.4%
17.6%
17.2%
18.3%
17.3%
Loan to Deposit Ratio
92.7%
83.8%
84.1%
92.7%
84.1%
85.2%
Loan to Deposit & Borrowing
86.4%
78.6%
78.8%
86.4%
78.8%
64.2%
Provision to loans
0.53%
0.67%
0.65%
0.50%
0.66%
0.55%
C ost to Income
45.2%
41.4%
47.2%
43.4%
44.3%
45.7%
Non Interest Inc./Total Income
38.3%
43.2%
46.1%
38.2%
44.6%
40.8%
Net Interest Margin (NIM)
2.45%
2.18%
2.00%
2.38%
2.08%
2.15%
Tax rate (Reversal)
Loan Loss Reserve/NPLs
2.25%
(108)
2.49%
2.53%
216.0% 170.4%
173.7%
17.2%
19.1%
19.4%
18.5%
19.2%
19.4%
Loan Growth YoY
5.9%
1.6%
1.4%
5.9%
1.4%
2.9%
Loan Growth QoQ
1.1%
-0.4%
0.9%
1.1%
0.9%
Source: KTZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 2: BBL's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
2015E
1.75
PBV (x) Implied market price (Bt)
to current price (%)
+2.0SD
1.5
271
57
+2 S.D. 1.50
+1 S.D.
Upside/ Downside
+1.5SD
1.4
255
48
-0.5 S.D.
+1.0SD
1.4
240
39
-1 S.D.
+0.5SD
1.3
224
30
-2 S.D.
Average
1.2
209
21
-0.5SD
1.1
193
12
-1.0SD
1.0
177
3
-1.5SD
0.9
162
-6
-2.0SD
0.8
146
-16
+0.5 S.D.
1.25
Avg.
1.00
Jul-15
Feb-15
Apr-14
Sep-14
Nov-13
Jul-12
Dec-12
Feb-12
Apr-11
Sep-11
Jun-10
Nov-10
Jul-09
Dec-09
Feb-09
Apr-08
Sep-08
Nov-07
Jun-07
Jan-07
0.50
May-13
0.75
Source: Bloomberg, KT ZMICO Research
Figure 3: BBL's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2015E
14.0
PER (x) Implied market
+2 S.D.
13.0 +1 S.D.
12.0 11.0
Avg.
10.0 9.0
-1 S.D. -2 S.D.
8.0 7.0
Jul-15
Feb-15
Sep-14
Apr-14
Nov-13
May-13
Dec-12
Jul-12
Feb-12
Apr-11
Source: Bloomberg, KT ZMICO Research
Sep-11
Jun-10
Nov-10
Dec-09
Jul-09
Feb-09
Sep-08
Apr-08
Jan-07
Jun-07
5.0
Nov-07
6.0
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
13.2
236
36
+1.5SD
12.5
224
29
+1.0SD
11.8
212
22
+0.5SD
11.2
199
15
Average
10.5
187
8
-0.5SD
9.8
175
1
-1.0SD
9.1
163
-6
-1.5SD
8.4
151
-13
-2.0SD
7.7
138
-20
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market return over six months period because of specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to below market return over six months period because of specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Earnings Review
Close Bt173.00
Banking July 22, 2015
Beat forecast/Below forecast/In line
2Q15 earnings in line
FY15
FY16
Consensus EPS (Bt)
18.426
20.038
KT ZMICO vs. consensus Share data
‐3.0%
‐2.5%
Reuters / Bloomberg
BBL.BK/BBL TB
Paid‐up Shares (m)
1,908.84
Par (Bt)
10.00
Market cap (Bt bn / US$ m)
330.00/9,589.00
Foreign limit / actual (%)
25.00/33.98
52 week High / Low (Bt)
216.00/170.50
Avg. daily T/O (shares 000)
4,907.00
NVDR (%)
32.20
Estimated free float (%)
97.47
Beta
0.70
URL
www.bangkokbank.com
CGR
Cheap valuations and solid balance sheet are main appeals We maintain an Outperform rating for BBL as we see its cheap valuations (with 2015E P/BV of just 0.98x and the current P/BV getting near its low band level, see figure 2) and its more solid reserve cushion vs. peers remaining BBL’s main price catalysts and support. 2Q15 net profit in line with our forecast and the street BBL’s 2Q15 net profit (NP) of Bt8.0bn (‐11% YoY, ‐15% QoQ) was quite in line with our forecast of Bt8.2bn and the street estimate of Bt8.4bn. 2Q15 net profit down 11% YoY and 15% QoQ The main reasons for the NP drop were NIM contraction and a higher provision YoY. Meanwhile, non‐interest income still grew favorably by 22% YoY and 5% QoQ boosted mainly by 1) the booking of huge investment gain of Bt2.3bn in 2Q15 and 2) higher gain on trading and FX transactions (+33% YoY, +12% QoQ), with both being ahead of our forecasts. Following the large investment gain, BBL set a higher provision in 2Q15 at 65 bps vs. its 55 bps guidance (~Bt10bn) for 2015E. Asset quality weakened QoQ but new NPL formation rate declined QoQ The bank’s NPLs increased sharply by 16% QoQ to 2.5% of loans from 2.2% in 1Q15 partly because the bank rarely did any loan write‐offs in 2Q15. However, we saw some positives in 2Q15 as its special mention loan ratio dropped to its normal level of 2.25% of loans in 2Q15 vs. the hike to 3.1% in 1Q15. We still expect BBL to be able to handle its asset quality and the macro headwinds efficiently given its prudent risk management and solid reserve position vs. peers. Maintain earnings forecasts The 1H15 NP accounted for 51% of our FY15 NP; thus, we maintain our forecasts. Although we see risk of higher provisioning vs. our current forecast of Bt10bn for 2015E, higher‐than‐expected investment gain as well as gain on trading and FX transactions could largely help to offset this negative. Financials and Valuation FY Ended 31 Dec
2013
2014
2015E
2016E
2017E
PPOP (Btm)
36,085
34,616
33,987
38,132
43,040
Net profit (Btm)
35,906
36,332
34,131
37,276
42,111
18.81
19.03
17.88
19.53
22.06
EPS growth (%)
13%
1%
‐6%
9%
13%
Book value (Bt)
206.48
EPS (Bt)
155.03
169.47
176.93
190.44
Prapharas Nonthapiboon
Dividend (Bt)
6.50
6.50
6.50
6.50
7.50
Analyst, no 17836
FY Ended 31 Dec
2013
2014
2015E
2016E
2017E
PER (X)
9.20
9.09
9.68
8.86
7.84
[email protected] 66 (0) 2695‐5872
PBV (X)
1.12
1.02
0.98
0.91
0.84
Dividend yield (%)
3.76
3.76
3.76
3.76
4.34
ROE (%)
13%
12%
10%
11%
11%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
2Q15 net profit down 11% YoY and 15% QoQ The main reasons for the NP drop were 1) NIM contraction (by ~45 bps YoY and 19 bps QoQ) on the rate cut impact given its plentiful liquidity position as well as from its weaker asset quality; and 2) higher provision YoY. Meanwhile, loan growth was quite slow at just +1% YoY and QoQ. Non‐interest income still grew favorably by 22% YoY and 5% QoQ. This was mainly boosted by 1) the booking of huge investment gain of Bt2.3bn in 2Q15 (including gain from the sale of the IRPC stake) vs. the gain of Bt499mn in 2Q14 and Bt1.2bn in 1Q15; 2) higher gain on trading and FX transactions (+33% YoY, +12% QoQ), with both coming out ahead of our forecasts. Following the large investment gain, the bank set a higher provision in 2Q15 at 65 bps vs. its latest guidance of 55 bps (~Bt10bn) for 2015E. Asset quality weakened QoQ but new NPL formation rate declined QoQ The bank’s NPLs increased sharply by 16% QoQ to 2.5% of loans from 2.2% in 1Q15 following the weak economy and because the bank rarely did any loan write‐offs in 2Q15. The higher NPLs were due largely to higher NPLs from a few corporate clients followed by smaller size SMEs, as well as from the bank’s qualitative NPL assessment. However, we saw some positives in 2Q15 as its special mention loan ratio dropped to the normal level of 2.25% of loans in 2Q15 vs. the hike to 3.1% in 1Q15. BBL still expects to be able to maintain its NPL ratio in the range of 2.4‐2.6% at yearend as the bank is normally better at resolving its NPLs in 4Q through debt restructuring and loan write‐offs. We therefore still expect BBL to be able to handle its asset quality and the macro headwinds efficiently given its prudent risk management and solid reserve position. The higher NPLs QoQ resulted in a lower loan loss reserve to NPLs ratio to 170% in 2Q15 from 190% and a lower reserve to the BoT’s required reserve to 242% in 2Q15 from 267%. However, these ratios remain solid and are the highest in the banking sector when compared with the sector averages of ~110% and ~150% for 2Q15, respectively. Figure 1: 2Q15 earnings results Statement of comprehensive income (Btmn) Fiscal Year-Ended Dec.
2Q14
1Q15
2Q15 % YoY % QoQ
1H14
1H15 % YoY
2015E
% YoY % 1H to 15E
Net Interest Income
14,962
14,235
13,218
-12%
-7% 29,028
27,452
-5%
57,397
-3%
48%
Non Interest Income
9,283
10,813
11,328
22%
5% 17,954
22,141
23%
39,637
12%
56%
Operating Income
24,245
25,048
24,545
1%
-2% 46,983
49,593
6%
97,034
3%
51%
Operating Expenses
10,961
10,376
11,589
6%
12% 20,373
21,965
8%
44,376
3%
49%
Operating Profit-pre tax
10,698
11,936
8,937
-16%
-25% 22,457
20,872
-7%
42,246
-2%
49%
Provision Expenses (Reversal)
2,331
2,980
2,922
25%
-2%
4,435
5,901
33%
10,086
16%
59%
Tax expenses (Reversal)
1,885
2,235
1,942
3%
-13%
4,107
4,177
2%
8,259
-4%
51%
Minority Interest
NM
59%
Net Profit
9,029
(38)
9,407
8,035
-11%
-15% 17,994
17,442
-3%
34,131
-6%
51%
PPOP-post tax
8,813
9,700
6,995
-21%
-28% 18,350
16,695
-9%
33,987
-2%
49%
4.73
4.93
4.21
-11%
-15%
9.14
-3%
17.88
-6%
51%
EPS (Bt)
Key Statistics & Ratios
2Q14
Gross NPLs (Btmn)
45,007
Gross NPLs/Loans
(50)
1Q15 47,473
(58)
2Q15 55,126
NM
NM
(74)
9.43 1H14 45,007
1H15 55,126
NM
(183)
2015E 56,213
2.26%
2.20%
2.50%
216.0%
189.9%
170.4%
Tier I to Risk Assets
14.8%
15.2%
15.5%
14.8%
15.9%
14.8%
C apital Adequacy Ratio
17.2%
17.4%
17.6%
17.2%
18.3%
17.3%
Loan to Deposit Ratio
92.7%
83.8%
84.1%
92.7%
84.1%
85.2%
Loan to Deposit & Borrowing
86.4%
78.6%
78.8%
86.4%
78.8%
64.2%
Provision to loans
0.53%
0.67%
0.65%
0.50%
0.66%
0.55%
C ost to Income
45.2%
41.4%
47.2%
43.4%
44.3%
45.7%
Non Interest Inc./Total Income
38.3%
43.2%
46.1%
38.2%
44.6%
40.8%
Net Interest Margin (NIM)
2.45%
2.18%
2.00%
2.38%
2.08%
2.15%
Tax rate (Reversal)
Loan Loss Reserve/NPLs
2.25%
(108)
2.49%
2.53%
216.0% 170.4%
173.7%
17.2%
19.1%
19.4%
18.5%
19.2%
19.4%
Loan Growth YoY
5.9%
1.6%
1.4%
5.9%
1.4%
2.9%
Loan Growth QoQ
1.1%
-0.4%
0.9%
1.1%
0.9%
Source: KTZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Figure 2: BBL's P/BV band and sensitivity of market prices based on P/BV at different standard deviation levels (X)
2015E
1.75
PBV (x) Implied market price (Bt)
to current price (%)
+2.0SD
1.5
271
57
+2 S.D. 1.50
+1 S.D.
Upside/ Downside
+1.5SD
1.4
255
48
-0.5 S.D.
+1.0SD
1.4
240
39
-1 S.D.
+0.5SD
1.3
224
30
-2 S.D.
Average
1.2
209
21
-0.5SD
1.1
193
12
-1.0SD
1.0
177
3
-1.5SD
0.9
162
-6
-2.0SD
0.8
146
-16
+0.5 S.D.
1.25
Avg.
1.00
Jul-15
Feb-15
Apr-14
Sep-14
Nov-13
Jul-12
Dec-12
Feb-12
Apr-11
Sep-11
Jun-10
Nov-10
Jul-09
Dec-09
Feb-09
Apr-08
Sep-08
Nov-07
Jun-07
Jan-07
0.50
May-13
0.75
Source: Bloomberg, KT ZMICO Research
Figure 3: BBL's PER band and sensitivity of market prices based on PER at different standard deviation levels (X)
2015E
14.0
PER (x) Implied market
+2 S.D.
13.0 +1 S.D.
12.0 11.0
Avg.
10.0 9.0
-1 S.D. -2 S.D.
8.0 7.0
Jul-15
Feb-15
Sep-14
Apr-14
Nov-13
May-13
Dec-12
Jul-12
Feb-12
Apr-11
Source: Bloomberg, KT ZMICO Research
Sep-11
Jun-10
Nov-10
Dec-09
Jul-09
Feb-09
Sep-08
Apr-08
Jan-07
Jun-07
5.0
Nov-07
6.0
Upside/ Downside
price (Bt)
to current price (%)
+2.0SD
13.2
236
36
+1.5SD
12.5
224
29
+1.0SD
11.8
212
22
+0.5SD
11.2
199
15
Average
10.5
187
8
-0.5SD
9.8
175
1
-1.0SD
9.1
163
-6
-1.5SD
8.4
151
-13
-2.0SD
7.7
138
-20
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market return over six months period because of specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to below market return over six months period because of specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
