Nomura Equity Research downgraded Bank of Ayudhya Pcl to ‘neutral’ from ‘buy’ and lowered its price target to 36 baht from 39 after the bank reported weaker-than-expected quarterly earnings due to slower growth in retail and SME loans.
Bank of Ayudhya shares were up 1.5 percent at 33.5 baht, with a year-to-date gain of 3.1 percent, underperforming the banking subindex’s 10.8 percent rise.
Nomura said it cut earnings forecasts by 9 percent in 2013 and 12 percent in 2014, reflecting lower margins, higher costs and a higher provision structure.
“After improving significantly during 2012, our concern is that BAY’s return on assets (ROA) is capped at 1.5 percent from 2013-15F after rising from 1 percent since 2011,” it said.
For the bank’s earnings statement, click 1114 (0414 GMT) (Reporting by Viparat Jantraprap in Bangkok; Editing by Anand Basu)