First Read: Bangkok Bank "Q226A: profit miss on persistently elevated costs"

研报英文原文证据摘录

First Read: Bangkok Bank "Q226A: profit miss on persistently elevated costs"

Forecast returns

Forecast price appreciation -17.0%

Forecast dividend yield 4.8%

Forecast stock return -12.2%

Market return assumption 7.2%

Forecast excess return -19.4%

Company Description

Bangkok Bank is the sixth largest bank in Southeast Asia and the largest bank in Thailand by

total assets as of 2022. The Bank is a leading provider of corporate finance and SME lending,

with approximately 240 business centers and business desks, and also has the largest retail

customer base, at more than 17m accounts. A pioneer in international banking, the bank has

the largest branch network of any Thai bank, with a total of 1,059 branches globally.

Valuation Method and Risk Statement

We derive our price target using P/BV methodology, based on 2022-24E sustainable ROE, a

1.99% risk-free rate and a 5.82% risk premium.

Company-specific upside risks: 1) its regionalization strategy yields better-than-expected loan

growth and NIM; 2) more willingness to ease excess provisions to recuperate tier 1 capital,

dividends and ROE back to pre-Permata and pre-COVID levels; and 3) the CEO succession

plan. Company-specific downside risks: 1) commercial-exposed portfolios are vulnerable to

cost-push inflation; 2) incapability to improve being customer-centric resulting in mobile

banking investment cost failing to break even and upward cost-of-funds pressure from

deposit mobilization after the virtual banking license.

Industry upside/downside risks: 1) new regulations to welcome fintech entrants through BoT

(ie, virtual banking licenses, P2P) and SEC (ie, crowd funding) licensing, which would threaten

customer/loan/deposit market share for conventional bank players; 2) the BoT may not catch