BBL feels pinch of slow economic recovery

The net profit of Bt9.4 billion increased by Bt442 million from the same period last year. 

Reflecting slow lending activities, the bank's net interest income increased by only Bt168 million or 1.2 per cent on year. At the end of March, total lending was Bt1.77 trillion, a decrease by Bt8 billion or 0.4 per cent from the end of December 2014. 

The bank also saw an increase in non-performing loans (NPLs) in the quarter, by Bt2.4 billion from end-December. The NPLs now accounted for 2.2 per cent of total loans, from 2.1 per cent at the end of December. It set aside additional Bt3 billion as provisioning expenses, to boost the loan loss reserves to 189.9 per cent of NPLs. 

Meanwhile, non-interest income rose by Bt2.1 billion or 24.7 per cent. 

In light of higher competition, the operating expenses also rose by Bt964 million or 10.2 per cent. 

In a statement, BBL said that the performance came against a backdrop of a delayed economic recovery in the first quarter, with exports falling due to a slowdown in the economies of Thailand’s major trading partners, especially China, and private sector investment rising only slightly as businesses awaiting for the government to clarify its economic plans, including its timeframe for major infrastructure investments. Meanwhile private sector consumption is gradually recovering.

"These factors combined to reduce loan demand, while at the same time financial institutions were cautious about lending," it said.