Brokerages bullish on banks' Q3 earnings
Brokerage houses are upbeat about the performance of the banking industry in the current quarter, during which listed banks' net earnings are expected to be up to 25 per cent higher than in the same period last year.
Securities companies cite continued loan growth from the previous quarter, while net interest margins have improved as a result of an increase in net interest income.
Krungsri Securities expects the net profits of the banking sector to come in at around Bt40 billion to Bt41 billion for the current quarter, 20-25 per cent above the same period last year but showing flat growth from the second quarter.
The growth of both net interest income and fee income are key drivers of the industry’s bottom line, while banks will get additional revenue in the form of a Vayupak Fund dividend.
However, loan-loss provisioning from the increase in lending and the higher risk resulting from economy volatility are expected to pressure net earnings, according to the securities house.
Maybank Kim Eng Securities (Thailand) estimates the net profits of the banking industry in the July-September period should grow by 5-8 per cent, quarter on quarter.
The brokerage expects Tisco Financial Group and Bank of Ayudhya to post outstanding profit growth both quarter on quarter and year on year, however.
Maybank Kim Eng forecasts full-year |net profits of the banking sector to rise by 27.5 per cent, driven by lending and fee income, while lower loan-loss provisioning and reduced tax costs are also positive factors.
Krungsri Securities predicts a 25.1-per-cent rise to Bt150 billion in full-year earnings for the sector.
