Banks boast another lucrative quarter

Thai banks have witnessed further impressive performance, with a jump in quarterly net profits due mainly to continued loan expansion. 

Siam Commercial Bank reported the quarterly net profit of Bt14.27 billion, 64.39 per cent up from Bt8.68 billion in the same period last year. It reported an increase in interest and non-interest income in the quarter.

TMB Bank reported a net profit of Bt1.8 billion in the first quarter, jumping by 125 per cent from Bt809 million in the same period last year, thanks to expansion in all businesses.

Chief executive officer Boontuck Wungcharoen attributed the jump to the rise of operating income by 22 per cent compared with the first quarter of 2012 and efficient cost management that resulted in a marginal increase of operating costs by only 3 per cent.

“We have managed to raise both interest and non-interest income. In this quarter, net interest margin went up to 2.95 per cent, or 44 basis points from 2.51 per cent, compared with the same period of last year thanks to effective deposit cost management and the increase of return on lending,” he said.

Net interest income rose by 21 per cent from last year. Meanwhile, the bank gained 44 per cent on fee income from mutual funds, bancassurance and lending. 

While performing loans increased by 17 per cent year on year, non-performing loans dropped by Bt230 million, translating to an NPL rate of 4.0 per cent, compared with 4.1 per cent of outstanding loans at end-2012. Provisioning coverage also increased from 113 per cent at end of 2012 to 118 per cent in the quarter. 

As of March, TMB’s capital adequacy ratio was 17.3 per cent and Tier 1 capital 11.5 per cent.

Tisco Financial Group, the parent of Tisco Bank, showed first-quarter net profit of Bt1.15 billion, up by 37.9 per cent from the same period last year. Oranuch Apisaksirikul, group chief executive, attributed the increase to loan growth in all segments as well as higher fee-based income, which boosted the return on equity to 24.6 per cent from 20 per cent in the corresponding period last year. 

The group’s interest income spiked 31 per cent while non-interest income jumped 60 per cent. 

Of total loans, hire-purchase (lease-to-own) grew 8.2 per cent on year to Bt176 billion, partially because of the government’s first-car-buyer scheme. Consumer loans expanded 6.6 per cent to Bt11.4 billion. Lending to small and medium-sized enterprises rose 15.1 per cent to Bt29.67 billion, largely loans to auto dealers. 

NPLs were maintained at 1.2-1.3 per cent, the lowest among its peers. 

“The growth momentum is obvious, while external factors remain risks,” Oranuch said. 

“We’re confident that the Thai economy will show impressive growth this year. Thanks to our group’s focus on our expertise, efficient management and tailor-made products, we should be able to achieve the loan-growth target of 15-20 per cent this year.”