Thai banking giants hit with double-digit profit drop last year
Two of Thailand’s financial giants – LH Financial Group (LHFG) and Tisco Financial Group (Tisco) – saw their net profits fall sharply last year amid the Covid-19 crisis.
LHFG's net profit in 2020 fell to Bt2.05 billion, down Bt1.15 billion or 36 per cent from Bt3.21 billion in 2019.
Tisco's net profit in 2020 dropped to Bt6.06 billion, down Bt1.20 billion or 16.6 per cent from Bt7.27 billion in 2019.
LHFG's net profit in the fourth quarter of 2020 alone was Bt205 million, down Bt674 million or 76.6 per cent compared to Bt879 million in the previous year. Its fourth-quarter net profit also dropped by Bt318 million quarter on quarter.
LHFG said the decline came after it used Bt1.09 billion in reserves to support debtors against the risk of non-performing loans (NPLs), resulting in an NPL ratio at the bank of 119.8 per cent.
LHFG's net interest income last year rose by 4.4 per cent after the net interest margin (NIM) increased to 2.17 per cent from 2.11 per cent in the previous year. Meanwhile, LHFG's net non-interest income rose by 17.2 per cent year on year from an increase in gains on investment.
Tisco's fourth-quarter net profit last year was Bt1.63 billion, down Bt229 million or 12.27 per cent from Bt1.86 billion in the previous year. However the bank's Q4 net profit rose by Bt25 million or 1.55 per cent quarter on quarter.
Tisco said the decline in net profit was due to the economic slowdown amid the Covid-19 outbreak, causing a drop in revenue from the bank's core businesses, as well as an increase in reserve funds to deal with credit loss.
Tisco's net interest income in 2020 rose by 2.4 per cent year on year from effective cost management amid a low-interest rate, while its net non-interest income fell by 12.6 per cent year on year due to a decline in fee income.
