TTB – Transfer of DBSVT’s retail securities business

TTB and DBS Bank have entered into a strategic partnership to enhance their wealth management business, under which the retail and high-net-worth securities business currently managed by DBSVT will be transferred to TTB Wealth Securities. We estimate that this could add around 1-2% to TTB's fee income, raising our earnings forecasts by 0.6% for 2027F and 1% for 2028F. We now expect earnings to fall 5% in 2027F due to the depletion of tax benefits. We expect a decent dividend yield of 6.2%. We maintain NEUTRAL with a hike in TP to Bt2.7 from Bt2.5.

Transfer of DBSVT’s retail securities business TTB and DBS Bank have entered a strategic partnership to enhance their wealth management, under which the retail and high-net-worth securities business (brokerage and wealth management) currently managed by DBS Vickers Securities (Thailand) (DBSVT) will be transferred to ttb wealth securities (subject to individual client consent). The portfolio transition is scheduled for completion by May 2027.

Positive impact on TTB. This move is positive for TTB as it will help expand its high-net-worth client base. In 1H26, DBSVT had a brokerage market share of 1.72%. We estimate that around 30% of this market share comes from retail investors. Assuming an average daily market turnover (excluding proprietary trading) of Bt60bn, we calculate that DBSVT's brokerage income from retail investors would be around Bt150-200mn. We estimate that this could add around 1-2% to TTB's fee income, depending on the migration of clients to TTB Wealth Securities. We raise our net fee income forecasts by 1% for 2027F and 2028F, now expecting net fee income to rise 8% in 2027F and 6% in 2028F. We also raise our earnings forecasts by 0.6% for 2027F and 1% for 2028F. We now expect earnings to fall 5% in 2027F due to the depletion of tax benefits. We expect improvement in wealth management to be a key earnings driver for TTB in 2026–2028.

Expect higher DPS. As TTB views that further share buybacks do not make sense at the current PBV above 1x, it is unlikely to repurchase more shares. It has already bought back 10.04bn shares (10.29% of total shares) worth Bt21bn, out of a total budget of Bt35bn. TTB is considering using the unused budget of Bt14bn to pay dividends. We expect TTB to raise DPS by Bt0.05 to Bt0.184 (including Bt0.081 interim DPS) at a 76% payout ratio from Bt0.134 for 2025, giving a dividend yield of 6.2%.

Maintain NEUTRAL with a hike in TP. We maintain NEUTRAL rating with a hike in TP to Bt2.7 (based on DDM) from Bt2.5 to as we raised L-T growth by 25 bps to reflect a potential improvement in wealth management.

Key risks: 1) Asset quality risk from economic slowdown, 2) credit cost risk from lower used-car prices, 3) NIM risk from a policy rate cut, 4) cybersecurity risk, and 5) ESG risk from market conduct.