STOCKS IN FOCUS
THAI MILITARY BANK (tmb)
"Hold"
By Asia Plus securities
We estimate third-quarter net profit at bt2.18 billion,
a decline of 3.2 per cent quarter on quarter (QoQ) and 8.4 per cent year on year (YoY). Although operating
Expenses would decrease in 3q15, such a positive factor would be offset as income from two mani sources, would weaken. Meanwhile, debt-provisioning expense wonld increase slightly following net loan growth in this quarter. Regarding the net interest income, net interest marging (nim) would weaken; although net loan would grow in every segment, a loan rate cut in late 2q15 could be a negative effect; funding cost wold remain flat.
For the non-interest income, fee income, mostly from bancassurance and fund selling, would shrink after growing strongly earlier, especially because of sluggish fund selling. We project TMB's net profit to weaken 15.8 per cent YoY in 2015 and then grow 14.1 per cent YoY in 2016 from the low base and hope about improving Busi-ness along with the economy. For 4Q15; We believe the bank earnings wold start close to that of 3Q15; NIM wold start to stabilise and growth would be seen from every segment of loan except small SMEs; to which the bank still applies a stringent policy