Auto industry may weigh on Kiatnakin Phatra Bank: analyst

Its Q4 2024 provision is 34% higher than in Q3.

Kiatnakin Phatra Bank saw a quarterly increase in provisioning and credit costs, raising concerns that Thailand’s automobile industry may drag on its performance, an analyst said.

KKP set aside a provision of THB914m in Q4 2024— lower by 36% compared to Q4 2024. However, this is 34% higher than in Q3 2024, raising credit cost by 19 basis points (bp) to 218bp in the last quarter of the year.

This comes as KKP reported a rise in the non-performing loan (NPL) ratio—  from 4.1% in Q3 to 4.2% in Q4.

This rise in provision expenses and credit costs has raised concerns that the economic recovery may be uneven, especially for Thailand’s automobile industry and market, said UOB Kay Hian analyst Thanawat Thangchadakorn.

“We are concerned that the uneven recovery in the automobile industry may drag KKP’s performance,” Thangchadakorn wrote in its report on KKP’s Q4 2024 company results.

“Our concerns are in line with management guidance for a negative loan growth in 2025 due to high risks associated with a structural change in the car industry,” he added.

UOBKH revised down its earnings forecasts for KKP on the back of a rising credit cost forecast.

KKP saw its net profit double to THB1.4b in Q4 (+110% YoY), on the back of net gain on financial instruments measured at fair value through profit or loss (FVPL).