Thailand’s Kiatnakin Phatra Bank’s loan portfolio to benefit from rising car prices

Used cars make up 62% of the bank’s hire purchase loans.

Thailand’s Kiatnakin Phatra Bank (KKP) is expected to benefit from the recovery of used vehicle prices in the country, analysts said.

Used car prices in Thailand are expected to recover in the last six months of 2024, thanks to government stimulus and the recovery of consumer spending. 

Used cars make up 62% of the bank’s hire purchase (HP) loan portfolio versus the just 38% of new cars, noted analyst Tanaporn Visaruthaphong and assistant analyst Thanawat Thangchadakorn of UOB Kay Hian.

Visaruthaphong and Thangchadakorn expects this to support the hire-purchase business of KKP TB.

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The expected upside from used car loans will also reflect on KKP’s whole loan portfolio, as HP loans account for 45.7% of KKP TB’s total loans.

Even before the expected upside on car loan prices, KKP TB has already reported a strong Q1. Net profit for the first quarter of 2024 rose by 125% quarter-on-quarter to THB1.5b, far above UOBKH’s expectations of a 37% rise. This comes as the bank’s credit costs are reduced.

However, the bank's non-performing loans (NPL) ratio rose, as KKP classified one large loan account as bad debt. The bank has already made provisions for this loan in Q4 2023.