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TMB and BAY reverse 2007's heavy losses
SOMRUEDI BANCHONGDUANG
Tan: Consolidation helps boost gains |
Thailand's six top banks reported first-half net profits of 43.91 billion baht, nearly eight times that of the same period last year.
The six banks - Bangkok Bank, Krung Thai, Siam Commercial Bank, Kasikornbank, Bank of Ayudhya and TMB - posted combined profits of 4.92 billion baht in the first half of 2007.
The sharp gains stemmed largely from two banks, Bank of Ayudhya and TMB, returning to profit after sharp losses on higher provisioning last year.
TMB, 30% controlled by ING Bank, showed the largest single improvement, posting a profit of 2.74 billion baht for the first six months compared with losses of 18.1 billion last year. BAY, 35% held by GE Capital, reported first-half profits of 3.03 billion baht, compared with losses of 7.8 billion the same period last year.
The other four banks also reported double-digit gains in profitability thanks to higher net interest margins and lower provisioning expenses.
SCB, Thailand's third largest bank, reported the highest net profits at 12.6 billion baht for the first half, up nearly 35% from the same period last year. Gains were driven by a 19% rise in interest income and a 23% gain in non-interest income.
For BAY, gains were in part due to the consolidation of GE Capital Auto Lease in February. Operating profits totalled 6.35 billion baht for the first six months, up 61% year-on-year, according to BAY president Tan Kong Khoon.
Net lending rose by 88.1 billion baht or 19.6% year-on-year, largely from the auto loan portfolio gained from GE Capital Auto Lease. Organic loan growth was 7.9 billion baht in the first half, or 1.7%. BAY has a full-year loan growth target of 26%, or 117 billion baht.
Bangkok Bank, the country's largest, reported first-half profits of 10.65 billion baht, up from 9.97 billion the same period last year. Loan growth was strong at 126.3 billion baht in the first half, up 12.2% from the same period last year.
Kasikornbank meanwhile posted first-half profits of 8.7 billion baht, up from 7.9 billion last year. The bank reported outstanding loans of 844.3 billion baht at the end of June, up 10.73% from the end of 2007.
An analyst at DBS Vickers said loan growth was a key driver for the improved profits shown in the first half for the sector.
Loan provisioning expenses also fell sharply compared with last year, when banks moved to comply with the tougher IAS39 accounting standard, she said.
But second half bank profits are expected to fall from the first half as economic growth looks to slow due to rising inflation and a bearish market.
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