Doldrums hit corporate earnings

Doldrums hit corporate earnings

First-quarter earnings of Siam Commercial Bank (SCB) were flat at 13.13 billion baht, while TMB Bank (TMB) and Tisco Financial Group Plc (TISCO) saw their annual earnings fall at double-digit percentage, a strong indication that the economic doldrums have begun to hurt corporate earnings.

The three banks were bellwether earnings of the banking sector, while the corporate sector earnings season will start in the final week of this month.

SCB's first-quarter earnings edged up 0.1% over the same period last year and jumped 11.7% from the previous quarter.

A 12.4% increase in net interest income helped offset a 6.5% decline in non-interest income, SCB's chairman Vichit Suraphongchai said in a statement.

The country's third largest bank's lending during the first quarter expanded 8.8% year-on-year but was flat from the end of 2013 to around 1.735 trillion baht.

The bank set aside 3.2 billion baht of loan loss provisions in the first three months, 27% higher than the provisions in the first quarter of last year. Its gross non-performing loans (NPLs) stood at 2.11% at the end of March, up from 2.06% over the same period last year and 2.14% at the end of December.

TMB and Tisco reported first quarter earnings plunged 11.81% and 19% from the same period last year to 1.6 billion baht and 935 million baht, respectively. On a quarterly basis, Tisco delivered a 16.2% earnings growth while TMB Bank posted a 11% drop.

TMB's lower earnings in the first quarter could be ascribed to a 10% year-on-year decline in non-interest income to 1.79 billion baht. This is due to a drop in fee income after sluggish mutual funds sales amid unfavourable stock market conditions and lower fees related to loans as the bank tightened its lending policy, especially for new customers, chief executive Boontuck Wungcharoen said in a statement.

The bank's lending for the January-to-March period expanded 0.3% from the end of last year to 1.2 billion baht as it has adopted cautious lending measures amid growing uncertainties. It also trimmed its loan growth target this year to 6-8%.

To cushion against the economic backdrop, TMB during the first three months set aside a 1.16 billion baht provision, slightly up from 1.16 billion baht in the same period last year but down from 1.74 billion baht the previous quarter.

Shares of SCB yesterday closed on the SET at 163 baht, up two baht in trade worth 1.73 billion baht,

Meanwhile TMB closed at 2.44 baht, down four satang in trade worth 620 million baht.

Tisco closed at 42.3 baht, down 25 satang in trade worth 135 million baht. 

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