Eleven SET-listed commercial banks delivered a 14.7% year-on-year increase in unreviewed aggregated net profit for the three months through September, largely boosted by lower loan-loss provisions, higher net interest income and TMB Bank's one-time gain of 11.8 billion baht from the divestment of a 65% stake in its asset management subsidiary.
The digital transaction fee waiver cut into fee-based income for the four largest banks -- Bangkok Bank (BBL), Siam Commercial Bank (SCB), Kasikornbank (KBank) and Krungthai Bank (KTB) -- during the third quarter, according to filings with the Stock Exchange of Thailand (SET).
For the nine-month period, their combined net profit fell 7.3% from a year earlier to 139 billion baht.
Best Q3 performers
TMB Bank (TMB), the country's seventh-largest lender by assets, emerged as the best performer among industry peers in the third quarter, with a 179% year-on-year surge in net profit to 5.59 billion baht.
The stunning quarterly net profit was attributed to the one-off gain from the sales of a controllable stake in TMB Asset Management (TMBAM) to Eastspring Investments, which boosted net non-interest income by 368% year-on-year to 14.5 billion baht.
With the stronger third-quarter net profit, TMB posted 9.9 billion baht in net profit for the January-to-September period, surging 54% from a year earlier.
KTB's quarterly earnings eclipsed peers, jumping 33.5% to 7.84 billion baht, driven by a 38.7% drop in impairment costs for loan loss to 6.08 billion baht from 9.92 billion in the corresponding period last year.
Non-performing loan (NPL) coverage ratio edged higher to 122.6% at the end of September from 121.7% at the end of 2017.
Gross NPLs rose to 4.42% of loans outstanding at the end of September from 4.19% at the end of last year.
The bank's net interest income fell by 2.8% year-on-year to 20.9 billion baht during the July-to-September period, and net interest margin (NIM) slid to 3.12% from 3.32% a year ago.
KTB's net fee and service income dropped 2.6% from the same period last year to 5.66 billion baht in the third quarter.
"Non-interest income fell by 330 million baht or 2.8%, due largely to lower gains on investments and net fees and service income, mainly from lower fees from loan-related services, combined with the decline in fees from transaction services caused by the exemption of transaction fees via digital channels," the bank said.
BBL was another large bank that enjoyed double-digit growth in third-quarter net profit, rising 10.6% from the corresponding period last year to 9.03 billion baht, driven by a 14.6% decline in loan-loss provisions to 5.35 billion baht and a 8.5% increase in net interest income to 18.3 billion.
Softer non-interest income was a drag on the bank's quarterly bottom line.
Non-interest income fell 2.8% year-on-year to 11.3 billion baht, weighed by a 5.1% drop in net fee and service income to 6.26 billion.
"Compared with the third quarter of 2017, non-interest income fell by 330 million baht or 2.8%, due mainly to decreases of 793 million in gains on investments and 336 million in net fees and service income, mainly from the decreases in fees from loan-related services and fees from transaction services caused by the exemption of transaction fees via digital channels," BBL said.
Worst results
Kiatnakin Bank (KKP) was the sole bank that reported a decline in net profit for the three months to September. The bank's quarterly net profit declined 9.9% to 1.55 billion baht, largely due to increases in other operating expenses.
Other operating expenses rose 10.5% year-on-year to 2.35 billion baht, the bank said in a filing with the SET, adding that losses on sales of foreclosed assets widened to 78 million baht from 37 million a year earlier.
The bank's net interest income rose 4.8% from the year before to 2.91 billion baht in the third quarter, and net fee and service income increased 3.1% to 1.06 billion baht for the same period.
KKP's impairment charges plunged 60.2% on the same period last year to 30 million baht for the July-to-September quarter.
NPL uptick trend
Seven of the 11 commercial banks showed higher gross NPLs relative to total loans at the end of September from the end of last year. Three reported lower NPL ratios and one bank's bad-loan ratio was steady.
KTB reported that its consolidated NPL ratio rose to 4.42% at the end-September from 4.19% at the end of last year, BAY's inched up to 2.12% from 2.05%, Thanachart Bank's increased to 2.42% from 2.3%, TMB's climbed to 2.69% from 2.35%, Tisco Financial Group's rose to 2.7% from 2.32%, CIMB Thai Bank's rose to 5.7% from 4.8% and LH Financial Group's edged up to 1.97% from 1.88%.
BBL saw gross NPLs decline to 3.6% of its loans outstanding at the end of September from 3.9% at the end of December last year, and SCB's NPLs edged down to 2.80% from 2.83%, while KBank's were steady at 3.3%.