Combined profits of state-owned banks plunge 20.5% last year
State banks' combined profits last year were down by 20.5 per cent on higher operating expenses, lower interest income, and a rise in non-performing loans, mostly in the business sector.
Specialised financial institutions (SFIs) posted combined profits of more than Bt36.2 billion, down by Bt9.3 billion from 2013’s Bt45.6 billion. However, their lending continued to expand, while overall financial stability is acceptable, with adequate reserves to support operations, said Fiscal Policy Office director-general Krisada Chinavicharana.
The average capital adequacy rate rose to a point considered sufficient to support the banks’ operations. Loans expanded 6.4 per cent to Bt3.94 trillion last year, compared with Bt3.7 trillion in loans in 2013.
Consumer loans contracted by 4.7 per cent relative to 2013, when they expanded by 7.2 per cent. This was because extension of personal loans was only 0.9 per cent, while in 2013 they expanded by 5.6 per cent. Meanwhile, business loans in 2014 grew by 5.5 per cent over 2013, when they expanded by 4.7 per cent. Lending rose for all types of business except for the service, property and construction sectors.
Meanwhile, the Thai Credit Guarantee Corporation had 10.6 per cent more financial guarantee obligations last year than in 2013. This was attributed to the continuation of the fifth phase of the portfolio guarantee scheme that began in 2013. Krisada said SFIs’ deposits, promissory notes, and bills of exchange amounted to Bt3.86 trillion, up by 4.4 per cent from 2013’s Bt3.7 trillion.
Combined outstanding NPLs stood at Bt217 billion at year-end 2014, an increase of Bt17.2 billion from year-end 2013. This meant bad loans jumped by 5.5 per cent last year compared with just 5.3 per cent in 2013, because of higher NPLs in the business sector.
Outstanding special mention loans at year-end 2014 stood at Bt121 billion, which was 3.1 per cent of total loans, relative to 2.3 per cent at year-end 2013. SFIs maintained adequate reserves of 159.2 per cent of total NPLs to mitigate their risk exposures.
