Overall banking profits take a dip in first quarter
THE banking industry’s first-quarter profits were hit by the subdued recovery of the Thai economy and substantial loan-loss provisioning, with combined net earnings in the first three months down 11.6 per cent to Bt35.82 billion year on year.
In their quarterly filings to the Stock Exchange of Thailand, listed banks agreed the economic circumstances in the first three months remained sluggish, mainly because of the slowdowns in the export sector, private consumption and investment, aggravated by the severe drought.
CIMB Thai Bank topped its peers by recording the highest net-profit growth of 150.6 per cent, followed by Land and House Financial Group at 74.11 per cent and Kiatnakin Bank at 67 per cent.
Kasikornbank’s net profit in the first quarter plunged by 22 per cent to Bt9.64 billion because of an increase of impairment loss on loans and debt securities by Bt2.46 billion, or 27.94 per cent from the previous quarter.
However, despite the high provisioning, KBank’s profit was impressive in the view of stock analysts.
Krungthai Bank reported net profit of Bt7.54 billion, down from Bt7.92 billion on the increase of provisions for bad debts, doubtful accounts and loss on impairment of Bt4.89 billion, or 131.55 per cent year on year.
KTB’s non-performing loans surged to 3.7 per cent from 3.59 per cent as of the end of last year. The increase in NPLs was partly from large and medium-sized business clients.
Asia Plus Securities analyst Usanee Liurut said 2016 would not be a normal year and banks that have enough profit had decided to reserve high provisions in the first quarter in order to reduce worries over the rest of the year.
If the economic situation in the second half is better, the banking industry might have no need to set provisions as high as it did in the first quarter, so overall net profits should be better than in the first half, she said.
Krungsri (Bank of Ayudhya) and its business units), showed a robust net profit growth of Bt5.2 billion for the first quarter, a 19per cent increase over the same period last year, notwithstanding the challenging environment and the seasonality impact on retail spending as well as repayment of corporate working capital.
This solid performance was broadly attributed to higher net interest income, non-interest income, as well as net fees and service income.
For the first quarter of 2016, total loans stood at Bt1.3 trillion, down by 0.1 per cent from December 2015, resulting from seasonality repayment of corporate working capital lines and lackluster loan demand. Meanwhile, the retail segment recorded growth in auto hire purchase and mortgage.
