Thai banks’ Q4 profit slated for 20% growth with portfolio cleanup

Kiatnakin Phatra Bank, Tisco may see a rise in credit costs, an analyst said.

Thai banks’ earnings are expected to rise by 20% year-on-year (YoY) in Q4 2024, but 7% lower compared to the previous quarter, according to estimates by UOB Kay Hian.

Aggregated net profit is estimated to fall at around THB51b (over $1.47b) for the quarter, with a reduction in credit cost due to “consistent cleaning up of portfolios,” said UOBKH analyst Thanawat Thangchadakorn.

Pre-provisioning operating profit will be flat in Q4 2024 compared to Q4 2023, but down 8% compared to Q3 2024.

Kiatnakin Phatra Bank (KKP) may make provisions and increase credit costs in Q4 compared to Q3 due to the uneven recovery in the used car price index, Thangchadakorn said. Tisco Financial Group may also see an increase in credit costs.

Overall, Thai banks’ asset quality should log gradual improvement.

“We performed a sensitivity analysis of a reduction in credit cost. If banks can reduce credit cost by 1 [basis point], net profit will increase by 0.3% to 0.5%,” Thangchadakorn said.

(US$1 = THB34.54. Data from Refinitiv as of 6 January 2025, 10:54 AM)