Kasikornbank
FY14 loan growth guidance cut in line with our expectation
Kasikornbank Plc (KBANK)
NIM will be close to last year
Management maintains its NIM target in the 3.4-3.6% range (we expect an FY14 NIM of 3.35%). Easing competition for deposit mobilization could possibly enable lower funding costs than last year. KBANK also guides that its cost/income ratio target is unchanged at 45% (close to our number). The NPLs/loans ratio should not exceed 2.2% at YE14. The bank will set FY14 loan loss provisions pegged to a credit cost of 85 bps.
Anticipate moderate YoY earnings growth in 1Q14
We estimate a 1Q14 profit of 11.5bn, up by 14% YoY and 21% QoQ. The assumed earnings expansion was driven by loan growth of 7.6% YoY during the quarter, a stable NIM of 3.4% and fee income growth of 11% YoY. We expect a cost/income ratio of 41%, flattish YoY. Our 1Q14 pre-provision operating profit (PPOP) expectation is Bt18.9bn, up by 12% YoY and 19% QoQ.
