SCB reports drop in quarterly net profit

SCB reports drop in quarterly net profit

Bank witnesses 10.2% plunge year-on-year

A woman uses a Siam Commercial Bank ATM in Bangkok's Victory Monument area. WICHAN CHAROENKIARTPAKUN
A woman uses a Siam Commercial Bank ATM in Bangkok's Victory Monument area. WICHAN CHAROENKIARTPAKUN

Siam Commercial Bank (SCB) saw its unaudited consolidated second-quarter net profit plunge 10.2%, due largely to higher loan-loss provisions and a lack of one-time profit from asset divestment recorded in the same period a year before.

The country's third-largest lender by assets posted a quarterly net profit of 13.2 billion baht compared with 14.7 billion recorded in the same period last year, according to the bank's statement.

"The year-on-year decrease in quarterly net profit was partly from a large one-time gain on the disposal of the bank's shares in its non-life subsidiary in the second quarter of 2014 and substantially higher additional loan-loss provisions," it said.

The bank set aside provisions of 5.13 billion baht during the April-June quarter, surging 59.3% over the same period last year and 42.5% from the previous three months.

"This additional provisioning will provide a cushion against further asset quality deterioration amid the current weak economic climate," Arthid Nanthawithaya, chief executive and deputy chairman of the executive committee of the bank, said in the statement. 

Its gross non-performing loans (NPLs) at the end of June jumped 9.7% year-on-year to 46 billion baht from 41.9 billion and 6.6% over the quarter from 43.2 billion.

The bank's gross NPLs rose to 2.22% of outstanding loans at the end of June from 2.11% at the end of June last year and 2.13% at the end of March this year.

A 1% decline in its total income for the second quarter was also attributed to the lowered earnings in the period. During the second quarter, it posted total income of 33.3 billion baht, of which 20.8 billion was net interest income and the remaining 12.5 billion from non-interest income.

Its net interest margin in the second quarter was unchanged at 3.19% from the previous quarter, but fell from 3.35% in the same period last year. 

The bank's outstanding loans at the end of June rose 4.8% over the same period last year.

Unlike SCB, its three smaller peers — CIMB Thai Bank (CIMBT), LH Financial Group (LH BANK) and Kiatnakin Bank (KKP) — managed to deliver better net profits for the second quarter, though they put aside higher loan-loss provisions for the period.

CIMBT reported quarterly net profit of 218 million baht, an increase of 17.9% year-on-year. The bank set side 1.14 billion baht as loan-loss reserves for the second quarter, up from 439 million over the same period a year before.

As of June, the bank's NPLs were 8 billion baht or 3.9% of total outstanding loans, rising from 3.3% at the end of last year. Its coverage ratio declined to 94.3% from 95.2%. But the bank's capital adequacy ratio remained strong at 14%, of which 9.3% was tier one capital base.  

LH Bank announced a second-quarter net profit of 420 million baht, up 37.1% on year. The higher results could contribute to a 32.3% year-on-year increase in net interest income to 1.06 billion baht and a 51.3% surge in non-interest income to 335 million.

KKP's quarterly net profit amounted to 749 million baht, an increase of 19.3%, year-on-year. It set aside provisions of 524 million baht in the second quarter, compared with 327 million put aside in the same period last year.  

The bank's NPLs increased to 12.1 billion baht or 6.9% at the end of June from 5.6% at the end of last year. 

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