Listed banks report 3.5% net profit increase

Listed banks report 3.5% net profit increase

Thailand's 11 SET-listed banks reported solid growth of consolidated net profit for 2014 thanks to higher revenue from interest and non-interest income.

They announced total consolidated net profit for 2014 of 207 billion baht, a 3.56% rise year-on-year.

Siam Commercial Bank (SCB), the third-largest bank by assets, gained the highest profit of 53.3 billion baht, up 6.17% from 2013. But TMB Bank had the strongest percentage growth in net profit of 67.1% from 5.74 billion baht in 2013 to 9.58 billion in 2014.

Four banks recorded a decline in net profit: Thanachart Capital, a holding company of Thanachart Bank, fell 44.5%, Kiatnakin Bank dipped 40.3%, CIMB Thai Bank decreased 33.6% and Krungthai Bank (KTB) fell 3.81%.

KTB posted 2014 net profit of 33.2 billion baht, down mainly because of its risk management policy as it set up additional loan loss reserves to prepare for the slower economy. It increased its monthly normalised provision for doubtful accounts from the second quarter of 2014 to 700 million baht, up from 500 million.

The bank's loan loss provisions were worth 13.66 billion baht last year, up 10.94%, so its coverage ratio increased to 126.63% from 109.47% in 2013.

The largest state-owned bank's non-performing loans (NPLs) as of December were 56.18 billion baht, down by 276 million baht or 0.49%. At the end of last year, its gross NPLs stood at 2.41% and net NPLs 1.34%.

KTB's net interest income was 69.3 billion, up 7.47% year-on-year thanks to strong loan growth of 10.92%, but it booked a fall of 6.5% for non-interest income at 27.91 billion baht.

CIMBT, 93.17% owned by the Malaysia-based CIMB Group, recorded 2014 net profit of 988.8 million baht, down sharply from 1.49 billion, a 33.64% dip due to extraordinary items in 2013. Its operating income rose 2.5% to 10.51 billion baht in 2014.

CIMBT's gross NPLs stood at 6.4 billion baht, 3.3% of total outstanding loans, up from 2.5% in 2013. Bad debts rose because of the economic downturn that hurt borrowers' repayment ability and the increased borrowing amount of corporate accounts and retail segments.

As of December 2014, the bank's total loan loss reserves were 6 billion baht, an excess of 2.2 billion above the central bank's reserve requirement.

Maybank KimEng Securities forecasts banking loan growth this year of 7% assuming the country's GDP growth rate is 4%.   

Maybank also projects a weak recovery would create a higher rate of NPLs, especially from the retail sector and small businesses.

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