Kiatnakin Phatra Bank can reduce losses on sale of repossessed vehicles

Net profit fell by 30% to THB1.06b in Q1 2025.

Kiatnakin Phatra Bank (KKP) can reduce its loan losses by up to 52% year-on-year (YoY) on the sale of repossessed vehicles, according to UOB Kay Hian (UOBKH).

The Thailand-based lender saw its net profit drop 30% YoY to THB1.06b in Q1 2025, missing consensus expectations by 15%.

Its loan portfolio contracted 8% YoY (and 1.4% quarter-on-quarter (QoQ)) on the back of KKP’s focus on asset quality, said UOBKH analyst Thanawat Thangchadakorn.

KKP said that it has “maintained its prudent approach to set provisions” during the quarter, with provisions rising 81% YoY and 21 QoQ, at THB1.1b.

“KKP could reduce losses from the sale of repossessed vehicles by 52% yoy and 37% qoq, reflecting a continued decline in the volume of repossessed vehicles. However, the qoq increase in provision expenses in Q1 2025 has raised concerns that the economic recovery may be uneven,” Thangchadakorn said.

KKP is expected to further raise its provision expenses on the back of the US tariffs.

For 2025-2027, UOBKH expects KKP’s earnings to grow by 18.9%, 15.4%, and 13.4%, respectively. The brokerage house factored in the impact of the expected policy rate cut to 1.50% by the year-end, higher credit cost assumptions.