Bank's net profit expected to rise 20% in Q3
Brokerage houses have forecast that the banking industry's net profits in the third quarter will rise 20 per cent year on year on the back of 16-per-cent lending growth.
Capital Nomura Securities (CNS) said that total net profits of the banking sector in the third quarter this year would be Bt36 billion, a 20-per-cent growth year on year, and a 1-per-cent growth over the last quarter.
The research attributed the performance to the expected loan growth of 16 per cent and the strong growth in fee-based income.
The CNS report said that despite the impressive growth in net earnings of the banking sector, their stock prices still face volatility due to concerns about the European debt crisis and the risk of a US recession. The share prices of Thai banks have recovered, making them higher than banks in Asia by 9 per cent on average. The report said that local banks might face short selling.
According to research by Asia Plus Securities, the third-quarter earnings of nine banks in the Stock Exchange of Thailand will go up 25 per cent year on year to Bt36.3 billion.
DBS Vickers Securities (Thailand), has forecast that the eight major banks’ combined profits in the third quarter will surge by 26.6 per cent year on year to Bt36.07 billion and up 3.9 per cent quarter on quarter.
Arpaporn Sawaengpak, assistant manager research of DBS Vickers Securities (Thailand), said the higher net profits of the eight banks come from the 16-per-cent growth in lending year on year and a 1.2-per-cent growth quarter on quarter.
She said term loans and working
capital for the corporate sector and to SME customers were the key drivers of loan growth in the third quarter this year.
Also, fee-based income was another factor boosting the earnings of banks. DBS expects fee-based income in the third quarter of the eight banks to grow by 6 per cent year on year. Vayupak dividends and a reduction in loan loss provisions are also helping improve net earnings.
DBS expects TMB to record the highest net-profit growth of 100.9 per cent to Bt1.46 billion. Kasikornbank’s net profit is expected to grow by 35.7 per cent to Bt7.48 billion, Bank of Ayudhya’s by 34.9 per cent and Siam Commercial Bank’s by 32.5 per cent.
DBS has also revised down the lending growth of banks to 8.5 per cent from 12 per cent following massive debt repayment by the Finance Ministry in July.
The debt repayment by the ministry had lowered the lending growth of commercial banks this year to 13.2 per cent from the expected 14.4 per cent.
Next year, the banking sector will benefit from investments by the private sector and the measures of the government to boost domestic consumption as exports will witness a slowdown in growth due to the recession in the global economy.
