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Bangkok Bank (SET:BBL), 33.41% stake owned by Thai NVDR Co., Ltd., is one of the largest regional banks in Southeast Asia with total assets of 2.86 trillion baht at the end of the third-quarter 2016. The Thailand-based bank serves retail customers, small and medium size enterprises (SME), and corporate clients. It has 17 million business and retail customer accounts, approximately 240 business centers and business desks, and a network of 1,183 domestic and international branches. Bangkok Bank operates overseas branches in China, Hong Kong, the United States, the United Kingdom, Singapore, Indonesia, Laos, Vietnam, the Philippines and other countries.
The company said on October 20 that its third-quarter 2016 revenues were 26.95 billion baht, flat compared to the same quarter last year. The revenues missed the 27.24 billion baht consensus estimate of 4 analysts, according to the Financial Times. The company posted third-quarter 2016 earnings of 4.22 baht per share, which were 10.97% lower than last year's third-quarter results, and missed the 4.34 baht per share consensus estimate of 6 analysts.
Bangkok Bank said the 11% drop in third-quarter net profits from a year earlier were mainly due to a decline in non-interest income, rising operating costs and provisions. The provision for credit losses is an estimated amount to be lost and is treated as an expense on the company's financial statements.
The bank reported loans at the end of September 2016 of 1.9 trillion baht, up 1.8% compared to the end of 2015, while its loan growth target for 2016 is 3-5%. BBL said its consolidated non-performing loans (NPLs) increased 30.2% to 73.2 billion baht, from 56.2 billion baht at the end of December 2015, making the bank set aside its allowance for impairment loss on loans and debt securities, or loan-loss provisions, of 4.95 billion baht for the quarter, compared to 4.87 billion last year. Loan quality continued to deteriorate, as the NPL ratio increased to 3.4% in the third-quarter 2016, compared 2.8% at the end of December 2015.
For 2015, Bangkok Bank reported a dividend of 6.50 baht per share, unchanged from 2014. The 23 analysts covering the company expect dividends of 6.62 baht per share for the upcoming fiscal year, representing a year-over-year increase of 1.85%. The next earnings announcement is expected on January 18, 2017.
From our technical viewpoint, BBL shares have been trading in a descending wedge chart pattern since 2014. The stock was unable to break out the 178 baht level and just broke down the long-term trendline support. Shares of Bangkok Bank could pull back further to retest the 142 baht technical level, and trendline support at 135 baht, if the stock can’t find enough upside momentum.
According to the Financial Times, the consensus amongst 28 polled investment analysts covering Bangkok Bank gave the company a Hold rating, with the median 12-month price target of 180 baht a share, as of November 7, 2016.
Disclosure: No position and no recommendation. |
