Bangkok Bank

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One of the largest banks in Thailand with a loan portfolio of mainly commercial customers and controlled by the Sophonpanich clan. Bangkok Bank (BBL) appears to be conservatively managed, with low loan to deposit ratio, high capital adequacy ratio, and high loan loss reserve. Dividends appear to be sustainable as payout ratio is low, and loan loss always within expectation.

Over the long term, BBL will likely continue to grow with the Thai economy, though its growth in profits and dividends have been slow in the past decade. Recent acquisition of Bank Permata, a smallish bank in Indonesia, for 1.5 p/b from StanChart and Astra also does not look like a good decision.

But BBL's current discount to book value may deem the company worthy of further investigation.

Another of Thailand's largest bank which is also selling rather cheaply is Siam Commercial Bank. SCB's loan portfolio is mainly exposed to consumers, and the largest shareholder is the King. But its financial metrics are weaker than BBL. SCB will also likely grow as consumption increase in thailand over the long term.

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