Improved loan demand predicted to boost Kasikornbank's 2H14 earnings

3% growth is penciled in.

Analysts expect second quarter earnings of Kasikornbank to grow 2 percent year-on-year to THB11b, citing solid loan growth and stable net interest margin (NIM) as the factors.

According to a research note from Maybank Kim Eng, the earnings of Kasikornbank for the second half of 2014 are also expected to improve compared to the first half due to improved loan demand, healthy NIM, and lower provision expenses.

The report also said that Kasikornbank's loans are expected to grow 3 percent in the first half of 2014.

Here's more from Maybank Kim Eng:

YTD to May14, corporate and SMEs loans grew 4.5% and 2.9% while consumer loans grew only 0.3% due to weak private consumption from pre-existing high household debt levels .

NIM is expected to improve slightly due to lower funding costs from the maturity of expensive deposits. Non-interest income should be relatively weak from the high base effect.

Cost to income ratio should increase to 43% in 2Q14 from 40% in 1Q14 due to higher marketing and SGA expenses (seasonal effect).

Gross NPLs should increase slightly, parallel to the market and economic conditions while its NPL ratio is expected to be stable at 2.3. We expect KBANK to set aside 80bps credit cost in 2Q14, down from 100bps in 1Q14.