Banks Earnings Outperform Market Expectations, Consensus Shows Upside in Share Prices!

The earnings of commercial banks in 1Q20 outperformed analyst expectations while Bloomberg consensus shwed upside in share prices!

All of the commercial banks have announced their 1Q20 earnings amid concerns from investors over the economic plummet due to the coronavirus outbreak, which led to a continual rate cuts, and the new financial reporting standard.

 

The earnings came to everyone’s surprise when most of the banks reported better performance than the market had anticipated despite the TFRS, which affects classification, measurement of financial assets and financial liabilities, impairment of financial assets and hedge accounting.

The Siam Commercial Bank Public Company Limited (SCB), TMB Bank Public Company Limited (TMB) and Bank of Ayudhya Public Company Limited (BAY) reported an earnings in 1Q20 more than what the market had forecasted by at least 30%. Kiatnakin Bank Public Company Limited (KKP) had 20% higher earnings than forecasted.

Even though the coronavirus crisis and the new implementation of TFRS might hit some banks hard, the majority of analysts still had positive outlook on the banks. Upon comparing the share prices of the commercial banks to the analyst consensus, all of the stocks still have rooms for upsides.