Bangkok Bank

Bangkok Bank Plc (BBL)

What’s new? On Sept 3, BBL held a ceremony to mark the relocation of its representative office in Yangon to the Chatrium Hotel Royal Lake (it was previously on Myawaddy Street). Dr Prasarn Trairatvorakul, governor of the BOT, was BBL’s guest of honor for the event. The bank has had a representative office in Yangon since 1995.
Long experience in Myanmar: The Yangon representative office provides investment information and facilitates financial services for foreign investors in Myanmar that are BBL clients. It doesn’t perform any traditional bank functions because it doesn’t have a banking license (no foreign-owned banks have banking licenses in Myanmar yet). But BBL has alliances with two state-owned banks and four private banks in Myanmar.
AEC will be most positive for BBL: In addition to the representative office in Yangon, BBL has 25 full-service overseas branches across region and elsewhere (China, Hong Kong, Taiwan, Singapore, Indonesia, USA, UK, Japan, Malaysia, the Philippines, Vietnam and Laos), the most of any Thai bank. It is also the only Thai bank with a substantial international lending portfolio (and has the biggest single-client lending limit of any Thai Bank).
That overseas presence paves the way for BBL to act as financier of first choice for Thai firms when they make new investments in other countries in the ASEAN Economic Community (AEC) when it commences in 2015. BBL already has a significant track record helping to financing major foreign acquisitions by firms such as BANPU, TUF and IVL.
Action: The stock trades at an inexpensive YE12 PBV of 1.4x, which is below both the regional bank mean of 1.7x and the Thai Bank sector average of 1.5x. Given its strong earnings profile and scope for lending growth upside, we maintain our BUY rating.