The net profit of 10 banks out of a total of 12 fell last year from their 2005 results.

BankThai was the hardest hit, recording a net loss of Bt3.97 billion last year, 750.6 per cent down from a net profit of Bt611.25 million in 2005.

The sharp reduction was due mainly to impairment from yield maintenance income from the Financial Institutions Development Fund, loss from the Covered Asset Pool (CAP) and the provision to meet International Accounting Standard 39 (IAS39).

The bank recorded losses of Bt2.03 billion from loan agreements pertaining to the CAP in last year's fourth quarter, after earlier recording losses of Bt1.69 billion from yield maintenance income as of last June. In June, it also set aside provision for this at Bt175 million.

BankThai has set aside additional reserves of 786 million for itself and Bt664 million for its subsidiaries, in order to comply with IAS39.

TMB also recorded a large net loss of Bt12.82 billion for last year, a 257.46-per-cent fall from its 2005 net profit of Bt7.8 billion.

This was caused mainly by the bank's Bt18-billion provisions, of which Bt13 billion is to comply with IAS39 and the rest for possible losses from Thai Asset Management Cooperation notes.

The Bank of Ayudhya posted a 2006 net profit of Bt1.66 billion, or 72.3 per cent down from 2005, after making allowance for doubtful accounts of Bt6.3 billion. Bt3.7 billion of this is set aside as provision for its subsidiary, Ayudhya Asset Management.

Siam Commercial Bank reported a net profit for last year of Bt13.28 billion, a fall of 29.63 per cent from 2005. The country's third-largest bank set aside a loan-loss reserve of Bt5.1 billion in the fourth quarter of the year.

Kasikornbank announced a 2006 net profit of Bt13.66 billion, slightly down from its 2005 net profit of Bt13.92 billion. The country's fourth-largest bank said it was not affected much by the new BOT rules, because it was able to use its excess reserves as provision to comply with IAS39. The bank's loan-loss provision for last year's fourth quarter was Bt1.35 billion.

The country's largest bank, Bangkok Bank, posted net profit of Bt17.85 billion, a 12.07-per-cent decline year on year. The bank set aside loan-loss reserves of Bt9.89 billion in the fourth quarter.

Krung Thai Bank said that although it set aside Bt10.90 billion for loan-loss reserves in the final quarter of 2006, it still posted a net profit of Bt14.07 billion, a growth of 8.09 per cent year on year.

The country's biggest state-owned bank is one of only two banks reporting net profit growth for 2006.

The other is Standard Chartered Bank (Thai), which reported a net profit of Bt3 billion, up 62.62 per cent year on year, supported by an increase in both interest and non-interest income.

Somruedi Banchongduang

The Nation