KBank first with 2012 targets, hopes for 9-11% loan growth
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Kasikornbank is the first commercial bank to reveal its 2012 financial targets, providing both base and worst-case figures.
Based on growth in gross domestic product of 4.3 per cent, loan growth is projected at 9-11 per cent, better than the 7-9 per cent this year. In the worst case, loan growth would
be just 7-9 per cent, KBank president and chief executive officer Banthoon Lamsam and other bank executives told analysts this week.
According to the base forecast of lending growth of 9-11 per cent, KBank expects the retail sector to show the highest loan growth at 12-15 per cent, followed by small and medium-sized enterprises at 10-12 per cent and corporate loans at 8-10 per cent.
In the base forecast, net interest margin will be stable at the 2011 level of 3.4-3.5 per cent and in the worst case NIM will decline to 3.25 per cent.
Net fee-income is expected to expand by more than 18 per cent, with the growth led by transaction services and cross-selling. But in the worst case, which the bank executives said was based on GDP growth of 3.5 per cent, fee-based income will grow by just 15 per cent.
The rate of non-performing loans in 2012 is projected at below 2.7 per cent, against 3 per cent in 2011, but in the worst case, the NPL rate will be similar to this year’s.
Globlex Securities said in a research note yesterday that KBank’s loan-growth target
of 9-11 per cent would be supported by the expected economic recovery from greater invest-
ment of the corporate and SME sectors.
Kim Eng Securities’ research noted that KBank’s financial figures were in line with its own expectations, yet Kim Eng estimates GDP growth in 2012 at 3.5 per cent and loan growth
in the banking sector at 7.6 per cent.
The economy next year will continue to face high risks from the current massive floods. KBank has a large SME loan portfolio, so it might witness a higher risk than other banks, according to Kim Eng Securities.
KBank executives predicted that in the worst case GDP in the current quarter would drop by 6.3 per cent, and as a result full-year GDP will expand by only 0.9 per cent.
In terms of NPLs, the flooding is expected to affect no more than 0.5 per cent of KBank’s total loan portfolio, so the NPL rate this year will still be lower than 3 per cent.
Phillip Securities said it estimated KBank’s net profit in 2012 would be Bt33.7 billion, higher than the expected net profit of Bt28.11 billion in 2011.
