Despite loan growth being almost non-existent in the first two months of the year - 0.1 per cent year on year - the signs in February were more encouraging, with loan growth of 1.1 per cent month on month.

The bank's management is confident this momentum will continue over the next two months. Most of the demand should come from corporate loans, with an average yield of 6.2 per cent, and small- and medium-sized-enterprise borrowers, with an average loan yield of 8.1 per cent. A significant contribution has yet to be seen from the retail side, which has an average loan yield of 6.7 per cent.

Kasikornbank stands by its loan-growth target of 8-13 per cent this year, compared with the broker's estimate of 10 per cent.

Based on the assumption of moderate quarter-on-quarter loan growth of 0.7 per cent in the first three months of the year and despite a series of rate cuts in the quarter, the broker expects the bank's net-interest margin to fall 3 basis points quarter on quarter to 3.96 per cent. This is still high compared with Kasikornbank's peers.

The broker forecasts a modest quarter-on-quarter net-profit rise of 2.9 per cent for the bank in the this year's first quarter, based on lower operating and provisioning costs.