Bangkok Bank's NPLs may have risen to 3.15% in 1Q16

The increase seems broad based, analysts say.

Maybank Kim Eng analysts attended the bank’s analyst meeting where management provided a 1Q16 preview. Management believes NPLs may continue to gradually rise for the rest of the year, but the provision should not larger than THB12b, the target set earlier this year.

Based on what the meeting, Maybank Kim Eng expects flat growth in the loan book as corporate clients hold back investments until there are clearer signs of an economic recovery.

Here's more from Maybank Kim Eng:

In regard to the credit quality, we expect NPLs in 1Q16 to have risen by 15bps to 3.15%, leading to THB3.7b of provisions. The increase in NPLs seemed to be broad based. Due to an 11bps reduction in our NIM forecast, we lower FY16 net profit by 6%. We also lower FY17 net profit by 6% due to the same reason.

1Q16 oper. profit slightly lower QoQ/YoY
Despite the downwards revisions, NIMM during 1Q16 is likely to have slightly strengthened due to lower funding cost boosting net interest income growth by 1%, the same pace of growth as non-interest income. 

This might be partially offset by some expenses regarding digital TV clients, which should boost operating expenses by 5%. As a result, we forecast that 1Q16 operating profit fell by 2% QoQ (-5% YoY).