Loan revamp boosts TMB's net by 67%

TMB Bank’s net profit in the third quarter expanded by 67 per cent year on year to Bt1.87 billion mainly on interest-income improvements from loan restructuring, which raised net interest margin to 3.07 per cent.

Key revenue drivers were net interest income, which grew by 17.3 per cent to Bt5.18 billion, and net fee and service income, up 11.8 per cent.

Compared with the second quarter, net profit rose by Bt1.62 billion or 643.2 per cent, as the second quarter’s net earnings were pulled down by special provisions set as a counter-cyclical buffer. 

In the first nine months, net profit increased by 36 per cent to Bt3.938 billion from the same period last year. The earnings growth is attributed to higher core operational revenue and overall improvement in operational efficiency. The ratio of non-performing loans (NPL) improved to 3.8 per cent from 4.1 per cent at the end of last year.

“The bank aims consistently to provide the products and services that meet customer needs and create real value for customers – particularly the transactional-banking ones,” said TMB chief executive officer Boontuck Wungcharoen. 

“For the first nine months of this year, TMB’s achievement is demonstrated by the growth in total deposits by about Bt20 billion, or 4 per cent from last year. At the same time, total lending rose by 5 per cent compared with the end of last year, mainly through the expansion of loans to small and medium businesses. 

“Backed by the effective cost of fund management and increased returns on loans, net interest margin expanded to 3.07 per cent from 2.7 per cent. 

“The bank has leveraged the new customer base by cross-selling products that create real value for customers, generating higher fee income. Net fee and service income, consequently, grew by 28 per cent compared with last year. As a result, total operating income increased by 20 per cent. 

“Improved cost management in the past three years has helped optimise operating costs, which rose only marginally by 6 per cent, and has brought down the cost-to-income ratio to 50 per cent from 57 per cent. Net profit for the nine-month period was up by 36 per cent compared with last year.”

Bad loans declined by Bt336 million from the previous year, bringing the NPL ratio down to 3.8 per cent. Coverage ratio at the end of the third quarter rose to 138 per cent from 113 per cent at the end of last year. 

The bank keeps a high level of liquidity, as reflected by the loan-to-deposit ratio of 92 per cent in the third quarter. Its financial position remains strong, with a capital adequacy ratio according to the Basel III framework at 16.8 per cent and a Tier 1 capital ratio of 11.2 per cent, compared with the Bank of Thailand’s minimum requirements of 8.5 per cent and 6 per cent respectively.