Banking Sector to Resume Dividend Payment, Analysts Expect High-Yield of 4-5%

Analysts suggest to keep an eye on the banking sector’s interim dividend payment, notably SCB–KTB and KKP–TISCO, estimating to pay 4 – 5% of dividend yield after the stress test this coming October. Analysts have given “BUY” recommendations on BBL and TISCO at a target price of ฿120/share and ฿80/share respectively.   

 

Banking sector moved up yesterday (August 18) in hopes of the new stress test that could allow the bank to issue a dividend payment again. As of August 18, Kasikornbank Public Company Limited (KBANK) increased 1.71%, the Siam Commercial Bank Public Company Limited (SCB) increased 1.38%, Tisco Financial Group Public Company Limited (TISCO) jumped 2.62%, Bangkok Bank Public Company Limited (BBL) surged 1.90%, TMB Bank Public Company (TMB) increased 1.09%, Krung Thai Public Company Limited (KTB) increased 1.02% and Kiatnakin Bank Public Company Limited rose 1.89%.

 

KTB Securities (Thailand) (KTBST) has a positive view on the Bank of Thailand’s tendency of allowing the banking sector to resume dividend payments before the end of 2020. BOT is awaiting the results of the stress test in October. If commercial banks’ capitals exceed 12%, it is possible for the banking sector to return a dividend payment.

 

DBS Vickers Securities (Thailand) expects large commercial banks to pay 3 – 4% of dividend yield, while small banks will generate 4.5 – 6% of yield. 

 

Capital Nomura Securities (CNS) maintains a “Neutral” view on banking sector, giving  “BUY” recommendations on BBL and TISCO at a target price of ฿120/share and ฿80/share respectively, with top pick rating.