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TMB Bank Public Company Limited (SET:TMB), a 25.94% stake owned by the Ministry of Finance and 25.04% owned by ING Bank, is the seventh largest Thailand-based company by total assets and operates two business segments, which are commercial banking and retail banking. Currently, it has a network of over 455 branches nationwide. TMB international branches are located in Vientiane, Lao P.D.R. and in the Cayman Islands. The company’s subsidiaries include Phayathai Asset Management Co., Ltd., Designee for ETA Contract Ltd. and TMB Asset Management Co., Ltd.
On April 19, 2016, TMB Bank reported first-quarter 2016 revenues of 8.41 billion baht, up 6% year-on-year, but missed the 8.55 billion baht consensus estimate of 4 analysts, according to the Financial Times. The bank reported a first-quarter 2016 net profit of 2.09 billion baht, or EPS of 0.05 baht per share, up 28% year-on-year, in-line with the consensus estimate.
The bank said its loan-loss provisions, an expense set aside as an allowance for bad loans, decreased 21% to 1.88 billion baht. Non-performing loans (NPLs) increased 979 million baht to 21.45 billion baht at the end of March, while the NPL ratio rose to 3.11% from 2.99%, in-line with the bank's expectation.
For 2015, TMB Bank reported a dividend of 0.06 baht per share, unchanged from 2014. The 21 analysts covering the company expect dividends of 0.07 baht per share for the upcoming fiscal year, representing a year-over-year increase of 11.67%.
TMB Bank expects loans for small and medium-sized enterprise (SMEs) to grow by an additional 1-2 billion baht this year from the existing target, due to enforcement of the Business Security Act, according to the Bangkok Post. The law allows debtors to put up another five types of assets as collateral for loans and widens opportunities for business operators, and for SMEs in particular, to access sources of financing. The five new asset types are business, right of claim, movable property used in a business, immovable property used in a business, and intellectual property.
From our technical viewpoint, TMB is facing significant downside risk, as the stock is now testing the multi-year trendline support of the bearish ascending wedge chart pattern, in addition to testing the support level of the bearish descending triangle chart pattern at the 2.16 baht level. The stock could pull back to between the 1.8 baht and 2.0 baht levels, if the support levels can’t hold.
According to the Financial Times, the consensus amongst 24 polled investment analysts covering TMB Bank gave the company a Hold rating, with the median 12-month price target of 2.55 baht per share.
Disclosure: No position and no recommendation. |
