Kasikornbank hit quarterly record profit of THB11b

Even loan growth was laudable.

According to Maybank Kim Eng, KBANK announced new quarterly record earnings of THB11.0b, up 9% QoQ and 17% YoY, inline with the consensus of THB10.7-10.8b. 

There was no extra provisioning this quarter as KBANK had set it in 1Q13 previously. Loans grew well by 2.5% QoQ, with a slightly improved NIM to 3.52%. The net interest income grew 4% QoQ and 16% YoY.

Here's more from Maybank Kim Eng:

Fee income and Non-NII income continued expanding impressively, especially the bancassurance and FX gains. Opex increased on two extra items, first, a THB1.1b reversal of a TAMC reserve (+) and second, a THB1.6b impairment on the KTransformation investment (-).

NPLs rose slightly due to two big clients, but overall asset quality remained sound. The NPL ratio was maintained low at 2% with a healthy coverage ratio of 138%.  What’s next? The 1H13 earnings make 51% of our yearly projection of THB41b (+16% YoY), so we are maintaining our current projection.

We expect the 3Q13F earnings to continue expanding, but then drop significantly in 4Q13F due to seasonality and KT expenses. Next year, we forecast another 15% net profit growth. The slowing economic growth should not impact KBANK earnings performance significantly.

The bank has kept all financial targets unchanged. However, we still have to watch asset quality issues closely, which have shown some danger signs.