KTB shares fall sharply on biggest sell-off
Shares in Krung Thai Bank (KTB) saw a massive sell-off on January 21, wiping out 26 billion baht in market capitalisation and causing the stock price to fall by over 10%.
The sell off, the largest single-day cashing out in KTB's history, was triggered by the bank’s announcement of its fourth-quarter 2023 financial results. The bank reported a net profit of 6.11 billion baht, down 25% from the same quarter of 2022. The decline in profit was due to a number of factors, including higher provisions for bad loans and a decline in non-interest income.
Specifically, KTB set aside 13.07 billion baht in provisions for bad loans in the fourth quarter of 2023, up from 8.157 billion baht in the third quarter. This was due to the bank's exposure to a large corporate customer that is facing financial difficulties.
The sell-off of KTB shares is regarded as a sign of investors’ concern about the bank's financial health. The bank's management has said that it is taking steps to address the problems that led to the decline in profit, but it remains to be seen whether these measures will be enough to restore investor confidence.
According to securities analysts, the sell-off of KTB shares could have a number of implications for the Thai economy. First, it could weaken the bank’s lending capacity, which could lead to a slowdown in economic growth.
Second, it could raise the cost of credit for businesses and consumers, which could also weigh on economic growth. Third, it could damage the reputation of KTB, which is one of Thailand's largest and most important banks.
The Thai government has said that it is monitoring the situation at KTB and is prepared to take action if necessary. However, it is unclear what the government could do to prevent a further decline in KTB's share price.
