Krung Thai Bank's deposits climbed 16% YoY in November 2014

Thanks to the bank's special deposit programs.

Thailand-based Krung Thai Bank's management has maintained a positive view on the economic recovery this year.

According to a research note from Maybank Kim Eng, KTB reported strong loan growth of 3.3% MoM (7.7% YoY and 8.4% YTD) or THB60b (40% was government loan) in Nov 2014.

Further, deposits grew 6.7% MoM and 16% YoY in Nov 2014 after the bank launched three special deposit programs (2.5%, 3.5% and 4% interest rates for 4M, 15M and 60M periods).

LDR dropped to 86.6% in Nov 2014 from 95% in 3Q14. Maybank Kim Eng believes the bank will not launch any deposit campaign in 1H15 and LDR should bounce back to 90-92% this year.

Here's more from Maybank Kim Eng:

Expect healthy loan growth. We adjust loan growth from 7% and 9% for 2014 and 2015 to 8% for both years. KTB plans to sustain NIM and increase fee income by growing the SME and retail loans to 60% of loan book in the next three years (from 54% currently) through the new SME and retail credit underwriting system which will speed up the loan approval process.

Note that KTB will announce the financial target after releasing 2014 results in late Jan 2015. 4Q14 earnings preview. We expect loan growth of 2.8% QoQ and 8.0% YoY in 4Q14. NIM should be under pressure on the higher deposit base.

We assume THB4.2b of provisions (50% each for normal and extra provisions) in 4Q14. In sum, 4Q14 earnings should drop 20% YoY and 14% QoQ to THB8b while FY14 earnings are expected to decrease 2.5% to THB33b (EPS: THB 2.37).