Nomura Equity Research said it expects Thai banks to post the highest profit growth in ASEAN, adding that an investment and corporate/SME loan cycle was coming through from a depressed base. The broker said it rated Thai banks 'overweight'.
It put Singapore's banks at 'underweight', saying a weak profitability outlook offsets low valuation and Philippine banks at 'underweight' citing their rich valuation, with earnings risks to the downside from lower investment/forex gains and a rising effective tax structure.
It had 'neutral' on Malaysian and Indonesian banks.
The broker forecast earnings to rise by 13 percent for ASEAN banks in 2013, slightly lower than a 17 percent growth projection for 2012. It forecast earnings of Thai banks to rise by 30 percent in 2013 after a 30 percent increase in 2012.
"ASEAN is back after a lost decade, post the 1997 financial crisis .... The key, however, is investment which has been broadly lacking in these economies since the 1997 financial crisis, and which is now beginning to come through," it said.
Its ASEAN top picks were Bangkok Bank Pcl, Kasikornbank Pcl, CIMB Group Holdings Bhd and PT Bank Mandiri Persero Tbk. It rated Bank of the Philippine Islands 'reduce', saying the stock was expensive.
1213 (0513 GMT)
(Reporting by Viparat Jantraprap in Bangkok; Editing by Jijo Jacob)