Kasikornbank PCL

We expect KBank's credit costs to remain higher than for other large peers, at 170-200 basis points (bps) for 2024 and 2025. Post that, credit costs are likely to decline and start converging with the peer average. KBank's widespread domestic branch network and established franchise have enabled it to tap stable retail deposits with manageable funding costs. Low-cost current and savings account deposits contributed about 81% to the bank's total deposits as of Sept. 30, 2024. This share was one of the highest in the industry. The stable outlook on KBank reflects our view of the bank's strong market position as one of the largest banks in Thailand, its good capitalization, stable deposit base, and likelihood of government support. The

...Kasikornbank PLC's (KBank) credit losses will likely remain elevated for the next one to two years. We forecast the bank's nonperforming loans (NPLs) will increase gradually over the period as pandemic-related forbearance and restructuring measures unwind in Thailand. The overall impact is likely to be manageable, given KBank's active NPL management and pre-emptive provisioning policies. We expect KBank's credit costs to remain higher than for other large peers, at 170-200 basis points (bps) for 2024 and 2025. Post that, credit costs are likely to decline and start converging with the peer average. KBank will remain focused on asset-quality preservation amid tough operating conditions. About 7.5% of the bank's loan book as of Sept. 30, 2024, is under debt relief programs. This is slightly lower than peers'. In our view, KBank's underwriting standards are prudent and the bank has adequate risk-management mechanisms. The bank has been able to mitigate inherently higher-risk SME loans with...

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