Introduction

In a detailed analysis presented by CGS International, the financial performance and market positioning of Thai Credit Bank (CREDIT) and its regional peers across Thailand, Indonesia, Malaysia, and Singapore are examined. This report sheds light on the growth strategies, profitability metrics, and potential risks of these financial institutions, offering valuable insights for investors and stakeholders in the banking sector.

Thai Credit Bank: A Detailed Analysis

Performance Overview

Thai Credit Bank (CREDIT) has set ambitious financial targets for 2025, aiming for double-digit loan growth and an improved Return on Equity (ROE) of 17-22%. The bank is focused on micro-SME, home equity, and personal loans, which collectively formed 86% of its total loan portfolio as of Q4 2024. With a net interest margin (NIM) target of 8.5-9.0%, CREDIT continues to capture untapped opportunities in the underserved segments.

Key Drivers and Partnerships

CREDIT’s partnership with Ascend Money (Not listed) has significantly contributed to its loan growth, particularly in the personal loan segment, which grew by an impressive 126.3% year-on-year in 2024. As of Q4 2024, loans under this partnership amounted to THB3.7 billion, with expectations to rise to THB4.2 billion (+13.5% YoY) by Q4 2025.

Profitability and Risks

Despite robust loan growth, CREDIT faces competition in the micro-SME lending space and potential risks from Ascend Money’s application for a virtual banking license. However, the bank’s strong debt collection capabilities and prudent risk management aim to mitigate these challenges. CREDIT’s NPL ratio stood at 4.4% in Q4 2024, with plans to sell THB1.4 billion worth of NPLs in 2025, down from THB1.9 billion in 2024.

Financial Projections

The bank’s FY25F-26F EPS forecasts have been revised upward by 12.6-13.1%. CREDIT’s valuation metrics, including a P/E of 6.0x and a P/BV of 0.9x in 2025, reflect its robust profitability. The stock’s target price has been raised to THB26.12, reinforcing the “Add” recommendation.

ESG Initiatives

CREDIT has integrated ESG principles into its corporate strategy, focusing on financial inclusion, climate change, and diversity. Its flagship financial literacy program, “Tang To,” has benefited over 58,020 participants in 2023, highlighting the bank’s commitment to sustainable development.

Regional Peer Analysis

Thailand

• Bangkok Bank (BBL): The bank is rated “Add” with a target price of THB193. Its CY25F P/E stands at 6.2x, and its ROE is estimated at 8.2%. BBL’s dividend yield is projected at 4.6%.
• Kasikornbank (KBANK): Rated “Add” with a target price of THB187, KBANK offers a CY25F P/E of 7.7x and a dividend yield of 5.0%. Its ROE is forecasted at 8.3%.
• Krung Thai Bank (KTB): This bank has an “Add” rating with a target price of THB24.1. It boasts a CY25F P/E of 6.5x and a dividend yield of 5.4%.
• SCB X (SCB): SCB’s “Add” rating comes with a target price of THB130. Its CY25F P/E is 9.2x, with a dividend yield of 8.7% and an ROE of 9.3%.

Indonesia

• Bank Central Asia (BBCA): Rated “Add” with a target price of 12,525 IDR, BBCA leads the region with a CY25F P/E of 19.6x and an ROE of 21.6%.
• Bank Mandiri (BMRI): The “Add” rating is supported by a target price of 7,500 IDR. BMRI’s CY25F P/E is 9.0x, with an ROE of 20.2% and a dividend yield of 6.7%.
• Bank Rakyat Indonesia (BBRI): With an “Add” rating and a target price of 5,450 IDR, BBRI offers a CY25F P/E of 10.7x and a dividend yield of 7.9%.

Malaysia

• Public Bank Bhd (PBK): Rated “Add” with a target price of 5.57 MYR, PBK offers a CY25F P/E of 11.5x and a dividend yield of 4.4%.
• RHB Bank Bhd (RHBBANK): The “Add” rating is supported by a target price of 7.25 MYR. The bank’s CY25F P/E is 8.7x, with a dividend yield of 5.7%.
• Alliance Bank Malaysia Berhad (ABMB): ABMB has an “Add” rating with a target price of 5.27 MYR. It offers a CY25F P/E of 9.8x and a dividend yield of 5.0%.

Singapore

• DBS Group (DBS): Rated “Hold” with a target price of SGD43, DBS offers a CY25F P/E of 11.4x, with an ROE of 16.5% and a dividend yield of 5.6%.
• OCBC (OCBC): The “Add” rating is supported by a target price of SGD17.7. OCBC’s CY25F P/E is 10.0x, with a dividend yield of 4.9%.
• United Overseas Bank (UOB): Rated “Add” with a target price of SGD39.5, UOB offers a CY25F P/E of 9.4x and a dividend yield of 5.0%.

Conclusion

The financial analysis by CGS International highlights the strengths and challenges of Thai Credit Bank and its regional peers. From strong loan growth and profitability to ESG commitments, CREDIT stands out as a promising investment opportunity. Meanwhile, its regional counterparts also showcase robust metrics, making the banking sector an attractive space for investors. With comprehensive insights into each institution’s performance, this report serves as a valuable resource for stakeholders aiming to make informed decisions in the financial sector.