Bank earnings expand despite disruptive Q4
Siam Commercial Bank's 2011 earnings rose 49.9 per cent to Bt36.3 billion, driven by a Bt5.1 billion gain from the divestment of its stakes in SCB Life as well as growth in non-interest income and net interest margin (NIM).
“The results underscore the extraordinary resilience of the bank’s business model to unexpected events. The fourth quarter was incredibly disruptive and our focus rapidly shifted to assisting our employees, customers and communities affected by the flood," said Chairman Vichit Suraphongchai.
"We have again delivered annual results which exceed market expectations – something that is possible only through the deep engagement we have consistently nurtured, with our customers, employees and the community, firmly anchored on an operating platform that readily adapts to the constantly shifting landscape in which we find ourselves”.
The bank's non-interest income rose 37.9 per cent on year to B41 billion in 2011, while NIM expanded 27.1 per cent to Bt51 billion on the back of 22.1 per cent loan growth.
. In the fourth quarter alone, the bank posted the earnings of Bt6.7 billion.
CIMB Thai Bank's performance was even more impressive, with the 58.8 per cent increase in its annualised net profit to Bt1.32 billion.
President and CEO Subhak Siwaraksa attributed the increase mainly to the shared gain from Thai Asset Management Co Ltd (TAMC) and gain from the sale of non-performing loans to an affiliate company in the fourth quarter.
The bank also reported a 7.6 per cent increase in net interest income to Bt327.4 million, largely underlined by loan expansion. The fee-based income however dropped 4.9 per cent due to an increase in collection fee expenses.
The small-sized bank witnessed an impact from a higher funding cost. Fierce competition in the deposit market prompted it to raise deposit rates and the rates for bill of exchange, resulting in lower NIM.
As of Dec 30, deposits and B/Es were valued at Bt134.4 billion, up 20.7 per cent on year. Based on the outstanding loans stood at Bt119.3 billion, up 27.1 per cent on year, the loan to deposit ratio was 88.8 per cent.
Non-performing loans rose from 2.7 per cent of outstanding loans to 3.4 per cent, due mainly to credit quality deterioration and floods which affected debt collection.
