Kiatnakin Bank's 4Q14 earnings plunged 53% YoY to THB488m

Extra provisions hit the bank.

Thailand's Kiatnakin Bank saw its 4Q14 earnings fall 53% YoY and 42% QoQ to THB488m.

According to a research note from Maybank Kim Eng, this was 33% below its forecast due to the extra provisions.

Meanwhile, despite negative loan growth of 1.6% QoQ and 3.1% YoY in 4Q14, the bank's net interest income increased 3% QoQ.

This was driven by higher NIM of 4.14% (3.87% in 3Q14) on higher asset yield and lower funding cost.

Here's more from Maybank Kim Eng:

4Q14 non-interest income fell 15% YoY and 13% QoQ on a decline in brokerage and IB fees. On a positive note, gain from investment and NPA sales jumped to THB221m and THB353m in 4Q14 from THB22m and THB219m in 3Q14.

Asset quality was stable with 1% QoQ decline in gross NPLs with a stable NPLs ratio at 5.62% in 4Q14.
Although losses on sales of repossessed cars dropped to THB398m from THB618m in 3Q14, KKP increased provisions to THB1.5b from THB570m as the bank set a general provision of THB900m to improve the coverage ratio to 81% from 71% in 3Q14.

Note that the amount of NPLs and specialmention loans of used cars has dropped in 2H14 but NPLs ratio increased from the loan contraction.

Although we are more positive on its asset quality outlook, we expect a slower recovery on loan and fee income this year.