Major banks post strong 9-month results despite slower economy

Kasikornbank reported the highest net profit with Bt31.79 billion, followed by Bangkok Bank (BBL) with Bt28.2 billion.

Krungsri Group – Bank of Ayudhya and its business units – announced a net profit of Bt11 billion for the first nine months, up 0.6 per cent from the same period last year.

BBL’s consolidated net profit was Bt3.8 billion, or 15.5 per cent, higher than in the same period last year. Net interest income rose by Bt853 million and non-interest income by Bt4.4 billion, while operating expenses increased by Bt324 million.

The bank said the continued growth was due to its strategy of focusing on working closely with customers and offering, in a timely fashion, products and services appropriate to the needs of all customer segments.

BBL continued to grow across all segments – corporate, consumer and small and medium-sized enterprises. At the end of last month, total lending was Bt1.68 trillion, an increase of Bt81 billion, or 5.1 per cent, from the close of last year.

In terms of asset quality, non-performing loans (NPLs) stood at Bt46.6 billion at end-September. The bank said it was closely monitoring customers in this group and working alongside them to find ways to solve their problems.

BBL continues to be disciplined in setting aside every quarter provisioning expenses on loan and debt securities to prepare for future uncertainties, it said.

Provisioning expenses for the first nine months were Bt6.9 billion, the ratio of loan-loss reserves to NPLs stood at 200.9 per cent, and the ratio of loan-loss reserves to total loans was 5.6 per cent.

In terms of liquidity, deposits at the end of September were Bt1.87 trillion, an increase of Bt37.4 billion or 2 per cent from the end of last year. The loan-to-deposit ratio stood at 90 per cent.

Shareholders’ equity was Bt286.6 billion, equivalent to 11.6 per cent of total assets. The book value per share was Bt150.13, the bank reported.

Predee Daochai, president of KBank, said nine-month net profit of Bt31.79 billion represented a year-on-year rise of 15.35 per cent.

As of end-September, KBank and its subsidiaries’ combined assets were Bt2.24 trillion, higher by Bt162.59 billion or 7.83 per cent than at the end of 2012, with the increase largely due to investments and loans.

Gross NPLs to total loans stood at 2.13 per cent as of September 30, against 2.16 per cent at the end of last year.

During the first nine months, KBank set aside a higher allowance for impairment loss on loans, partially to serve as a countercyclical provision to prepare the bank for any potential future economic downturn and changing economic circumstances, both domestic and abroad.

This resulted in a coverage ratio of 132.85 per cent as of end-September, compared with 131.83 per cent at the end of last year, he said.

KBank’s Basel III capital adequacy ratio was 17.31 per cent at the end of last month, with a 13.13-per-cent Tier 1 capital ratio.

Janice Van Ekeren, chief executive of Krungsri Group, said its healthy loan growth of 2.9 per cent in the third quarter had met expectations given the slowing economy, and compared favourably to the banking group’s average growth of 2.1 per cent in the first two quarters.

For the third quarter, the group announced a net profit of Bt3.8 billion, a 24.5-per-cent increase quarter on quarter, and a 1.9-per-cent increase from the same period last year.

Loan-growth momentum remained healthy, she said. For the first nine months, loans grew 7.1 per cent, driven by all customer segments, representing an additional Bt59.2 billion in new lending from the end of December.

Year to date, retail loans grew by 12 per cent, followed by the SME and corporate segments, which grew 3.6 per cent and 1.3 per cent, respectively. The group’s NPL ratio stood at 2.6 per cent of overall lending at end-September, she added.

The group’s net interest margin remained strong at 4.32 per cent in the third quarter.

For the remainder of the year, Van Ekeren said Krungsri’s outlook remained moderate, given that the economic slowdown is expected to stabilise and improve later next year.

As of September 30, Krungsri – Thailand’s fifth-largest bank – had Bt889.2 billion in outstanding loans and Bt1.1 trillion in assets.

Meanwhile, Siam Commercial Bank (SCB) reported third-quarter net profit of Bt12.7 billion, a 26-per-cent increase from the same quarter of 2012. The substantial year-on-year increase was the result of higher net interest, fee and insurance-premium income as well as significantly higher dividend income and net trading and foreign-exchange income.

These gains were partially offset by a significant increase in provisions to enhance its countercyclical buffer against future uncertainties, while loan-portfolio quality remains stable.

Third-quarter operating profit (excluding impairment loss and/or provisions on loans and debt securities, income tax and non-controlling interest) increased by 30 per cent year on year to Bt19.8 billion, because of the substantial increases in both net interest income and non-interest income.

For the nine-month period ending on September 30, SCB reported net profit at a record high of Bt38.5 billion, a 28.6-per-cent increase from the same period in 2012.

Net interest income rose by 16.5 per cent year on year in the third quarter. This was the result of robust loan growth of 12.7 per cent year on year together with an increased proportion of higher-yield SME and retail loans in the portfolio.

In the third quarter, non-interest income increased by 34.6 per cent year on year. SCB said this very substantial increase was the result of an exceptional dividend from one of the bank’s equity investments, continued growth in net fee and insurance-premium income, and higher net trading and forex income.