• 3Q21 earnings review

Beat expectations

TTB reported Bt2.3b profit for 3Q21, falling 7% qoq but surging 46% yoy. The result beat our estimate by 27% and market estimate by 15%. 9M21 earnings account for 85% of our FY21 forecast.

• Analysis

Provisions were flat despite resurgence of Covid-19

Key positive surprises were better-than-expected provisions and operating expenses. TTB booked Bt5.5b provisions, flat qoq but falling 20% yoy due to the high-base last year. OPEX was under control with C/I ratio at 46.4%, better than our forecast of 48.7% after TTB decided to book rebranding and subrogation expenses in 4Q21 instead of 3Q.

The weaker qoq earnings was due to lower NIM and non-NII as a result of slower economic activities during lockdown in 3Q. However, non-NII only edged down 1% qoq to Bt3b and NIM dropped by just 3bps to 2.95%. Meanwhile, the strong yoy earnings growth was driven by a low-base last year from high provision charge.

The balance sheet has stopped bleeding as both loans and deposits had inched-up 0.1% qoq in 3Q21, but for 9M21, loans still shrank 2.4%. NPL ratio has ticked-up following higher economic risk (resurgence of C-19) and lockdown restrictions in 3Q, but is in-line with our expectations at 2.98% higher than 2.89% in 2Q.

•  Implication/ Recommendation

We maintain a BUY rating for TTB with Bt1.55 TP.