Seven large banks are expected to record almost Bt20 billion in net profits for the first quarter, a substantial reversal from net losses of Bt10.61 billion in the fourth quarter last year, thanks to lower provisions.

However, year on year, their first-quarter performance will drop about 14 per cent due to higher operating and tax expenses.

Seamico Securities said yesterday that the seven banks under its remit were expected to post Bt19.85 billion in first-quarter net profits. These banks are Bangkok Bank, Krung Thai Bank, Siam Commercial Bank, Kasikornbank, Bank of Ayudhya, Siam City Bank and TMB Bank.

The jump in quarter-on-quarter net profits was due to the provisioning requirements for Inter-national Accounting Standard 39 falling by 80 per cent.

Krung Thai Bank will enjoy the largest improvement in net profit, rising to Bt5.36 billion from Bt427 million.

"We anticipate that three of the seven banks - Bangkok Bank, Siam Commercial Bank and Kasikornbank - will reduce their provisions to a normal level as they had already set aside reserves in line with IAS 39 last quarter," Seamico said.

The broker said the remaining banks were expected to take significant provisions for IAS 39 during the second half of this year rather than the first half.

However, it believes the overall provisions of the seven banks will be lower than last year by 28 per cent.

Aside from lower provisions, Krung Thai Bank, Siam Commercial Bank, Siam City Bank and Bank of Ayudhya have reaped dividends on their Vayupak Fund investment.

Siam City Securities also released a report on the first-quarter results of six large banks excluding Siam City Bank.

The broker estimated the six banks' net profit in the first quarter at Bt19.57 billion, versus their net loss of Bt11.52 billion in the last quarter of 2006.

The provisioning burden of the six banks declined by 87 per cent on quarter.

However, their first-quarter net profits compared to a year ago fell by 10 per cent, mainly from higher expenses for information technology, staffing and tax.

TMB Bank and Bank of Ayudhya will see their year-on-year net profits fall the most, by 44 per cent and 23 per cent respectively.