Analyst Expects Higher Fee Income-Stronger Loan Growth to Boost KKP’s 2Q Earnings
The net profit of Kiatnakin Phatra Bank Public Company Limited (KKP) is predicted to increase YoY in 2Q21 due to greater brokerage fee income and stronger loan growth.
The net profit of Kiatnakin Phatra Bank Public Company Limited (KKP) is predicted to increase YoY in 2Q21 due to greater brokerage fee income and stronger loan growth.
30 มิ.ย. 2564

The net profit of Kiatnakin Phatra Bank Public Company Limited (KKP) is predicted to increase YoY in 2Q21 due to greater brokerage fee income and stronger loan growth.
KTBST Securities (KTBST) holds a BUY rating on KKP with a target price of 65.00 baht, which is pegged to 2021E PBV of 1.1x (its 10-yr average level). KTBST forecast 2Q21 net profit to grow 22% YoY to 1.45 billion baht (-1% QoQ). 
First, brokerage fee income from securities trading is expected to increase, as the market’s average daily trade has soared 41% YoY. Second, total loans are predicted to increase 5% YoY, or 6% YTD. However, the NPL ratio is expected to increase to 3.5% from 3.2% in 1Q21 as the moratorium program ended. 
KTBST maintains 2021 net profit forecast at 6.2 billion baht, which represents a 20% increase, as 1) NIM is expected to remain at a high of 4.67% compared to 4.3% in 2020, 2) fee-based income is estimated to rise 6% given the high average daily trade, and 3) loan-loss provision is forecasted to decline. 
Meanwhile, in 3Q-4Q21, net profit is projected to grow significantly YoY as 1) loan-loss  provision is expected to decline after the company set aside a substantial loan-loss provision of 1.0-2.0 billion baht each in 3Q-4Q20 (its normal level of 700-800 million baht), 2) the securities business should benefit from a high average daily trade, which was close to 100 billion baht, and 3) the EDT business is expected to remain strong, which will underpin the company’s earnings performance to beat its peers.
KKP’s stock price lost 10% over the past three months, underperforming the SET Index by 10%, which KTBST believed was due to a dividend payment of 2.25 baht per share. KTBST expects the stock to outperform the benchmark index in the medium term as 1) earnings are projected to grow significantly YoY in 3Q-4Q21, and 2) the stock currently sports an attractive dividend yield of 5%.