TMB net dips 12% in 2016 after large loan loss provisions
TMB Bank saw its net profit slide 12 per cent to Bt8.23 billion last year after setting aside huge provisions of Bt8.65 billion so that it could accommodate extra non-performing-loan write-offs to help mitigate future downside risk. TMB reported a 10-per-cent increase in consolidated pre-provision operating profit to Bt18.66 billion.
The extra NPL write-offs last year caused its NPL ratio to improve to 2.53 per cent from 2.99 per cent in 2015, while its coverage ratio remained strong at 143 per cent.
Chief executive officer Boontuck Wungcharoen said yesterday that outstanding loans grew by 2.2 per cent to Bt5.7 billion in 2016.
While business loans dropped because of the weak economic outlook, mortgage lending continued to expand thanks to the bank’s efforts to speed up processing procedures.
The bank reported to the Stock Exchange of Thailand that its lending to small and medium-sized enterprises fell by 3.1 per cent last year because the bank has grown more cautious about this sector.
Trirong Butragaht, chief SME banking officer, said TMB was not targeting loan growth for SMEs this year, even though it has seen a slight recovery among its SME customers.
The bank wants to keep its focus on income growth from the SME sector, especially fee income from transactional banking.
Income growth of SME banking is targeted at 10-15 per cent this year, the same rate as last year.
Trirong said his division covered 100,000 SMEs, of which 70,000 will be the main focus for the bank. It will take close care of those enterprises based on their level of transactions. This will allow the bank to help clients trim operating costs and offer them additional lending to reinforce liquidity.
In the bank’s view, SMEs with good potential are those related to public spending and some agricultural products that benefit from the bright prospects for fuel prices.
The bank will use digital platforms to strengthen SME clients’ businesses. Although some SMEs might not be familiar with digital platforms, TMB will design its digital model to be easy enough to use.
TMB will unveil the digital platform for SMEs next week, Trirong said. Yesterday, TMB in cooperation with Alibaba Group and Ready Planet expanded their e-commerce channel and offered financial solutions to encourage SMEs that are exporters and importers to employ e-commerce to raise their trading volumes.
The bank also set up an SME Trade Expert Programme to help SMEs that want to succeed in doing business on the digital platform of Alibaba.
“We aim to draw 300-500 enterprises to the programme. They will generate trade on Alibaba.com of around Bt3 billion to Bt5 billion.
“Products from Thailand have caught the interest of global buyers.
“Our programme and the special campaign that we and Alibaba designed for the customers of TMB will lead to a great opportunity for Thai SMEs,” he said.
