KTB's quarterly earnings likely drop by 39%: ASPS
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Krungthai Bank is expected to show a 39.2 per cent decrease in the third-quarter earnings, thanks mainly to the additional provision against loans to Sahaviriya Steel Industries (SSI), according to Asia Plus Securities.
The house expected the third-quarter earnings at only Bt5.62 billion, a 33.4 per cent decrease from the previous quarter and a 39.2 per cent decrease from the same period last year. This is based on the assumption that the provisions would rise by over Bt6 billion.
The bank's non-performing loans at the end of the quarter are expected to rise to 4.58 per cent of outstanding loans, from 3.42 per cent in the second quarter. This will reduce the coverage ratio (the ratio of provisions against NPLs) to 102 per cent from 124.5 per cent.
The house advised investors to underweight the stock for now, as it is trading below the target price of Bt18.50.
Three banks - KTB, Siam Commercial Bank and Tisco Bank - loan a total of Bt50 billion to SSI. The debt is being restructured following the shutdown of the Teesside facility in the United Kingdom. All the banks vowed to set aside full provisions against the loans.
