July 19, 2018 / 12:12 PM / 10 months ago

UPDATE 3-Thai banking shares climb as big four's earnings beat estimates

* Banking index up 2 percent by midday

* Kasikornbank books 21 pct Q2 profit rise

* Krung Thai Bank says profit soared 140 pct

* Impact of digital fee waiver milder than expected (Recasts on share moves, Kasikornbank and Krung Thai Bank earnings)

By Chayut Setboonsarng

BANGKOK, July 20 (Reuters) - Banking shares in Thailand rose on Friday after the country’s four biggest lenders all reported second-quarter profit that beat market estimates, as a decision to waive fees for digital transactions had a milder impact than analysts expected.

The Stock Exchange of Thailand’s banking index ended morning trade up 2 percent, helped by a 4 percent surge in the share price of the country’s third-biggest lender by assets, Kasikornbank PCL.

Earlier in the day, Kasikornbank reported a 21 percent rise in April-June profit versus the same period a year prior, helped by 4 percent growth in income earned from interest charged on loans. It said growth in non-interest income slowed to 1.7 percent due to the waiver; analysts were expecting a bigger hit.

Thailand’s big-four banks from April 1 waived fees on interbank transactions, bill payments and cash withdrawals to firm up competitiveness as technology firms expand into money-related services such as online payment and electronic wallets.

The move supports the government’s goal of making Southeast Asia’s second-largest economy a cashless society.

Thailand’s No.4 lender, Krung Thai Bank PCL, also reported earnings on Friday morning. It booked growth for the first time in four quarters with a 140 percent profit rise versus a year prior when it was hit with steep impairment costs.

Net interest income at the state-controlled bank fell 4.8 percent, but net income from fees and services rose 1.3 percent.

Krung Thai Bank’s stock was up 0.6 percent at midday.


Banks’ offensive against technology upstarts has involved partnerships and hefty investment in digital services. Kasikornbank has 8.4 million people signed up to its internet banking service, and in June, said its customers could make digital payments through Facebook Inc messenger.

Second-ranked Siam Commercial Bank PCL, which has tie-ups with Line Corp and Alphabet Inc’s Google, on Thursday said it aims to have 10 million digital users by the end of 2018 from 7 million at present.

The lender reported a 6.7 decline in profit after market close on Thursday, citing expenses in digital technology, and said non-interest income - pulled down by the fee waiver - fell 6.2 percent. The result nevertheless beat analyst estimates, and its shares were up 3.6 percent by midday on Friday.

Bangkok Bank PCL, Thailand’s biggest lender, also reported earnings late on Thursday, saying profit rose 14.3 percent. It said non-interest income soared 19.1 percent due to a rise in fee income from bancassurance and mutual funds.

“The domestic economy started to show more visible signs of recovery with solid growth in both private consumption and private investment,” the bank said in a statement.

Bangkok Bank’s shares were up 1.8 percent on Friday. (Reporting by Chayut Setboonsarng; Editing by Susan Fenton and Christopher Cushing)

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