SSI fiasco cuts Tisco Group's Q3 earnings by 25.6%
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Tisco Financial Group, the listed parent company of Tisco Bank, on Friday announced the third-quarter net profit of only Bt810 million.
The amount showed a 25.6 per cent decrease from the same period last year.
In a statement, the group attributed the sharp drop to additional provisions against Tisco Bank's loan to Sahaviriya Steel Industries (SSI).
The full provisioning affected the group, but not significantly, said Oranuch Apisaksirikul, president of Tisco Financial Group. She said that in the quarter, the group enjoyed an increase in interest and non-interest income and improvement in hire-purchase loan quality.
"There was no clear sign of economic recovery in the third quarter," she said. The bank's research unit lowered Thailand's 2015 economic growth forecast to 2.7 per cent from 3 per cent. The unit however expected the faster-than-expected recover in the tourism industry as well as positive impacts from the government's economic stimulus package.
In the quarter, its outstanding loans dropped by 4.8 per cent from the previous quarter to Bt237 billion, due to the write-off of loans to SSI. The non-performing loans also rose from 2.86 per cent of outstanding loans to 3.30 per cent, as a Bt821 million loan to SSI was classified as NPL.
The quarterly earnings dropped though the group managed to cut the operating expense by 35.5 per cent, to bring the expense to revenue ratio to 22.7 per cent.
Its tier-1 capital remained high at 13.88 per cent of risk-weighted assets.
