Local banks post mixed 1st-quarter performance
Siam Commercial Bank and TMB Bank posted lower net profits in the first quarter than a year ago, while Kasikornbank managed to improve its net earnings.
Net profit at Siam Commercial Bank was Bt3.7 billion, down from Bt4.22 billion in last year's first quarter. Kasikornbank made Bt3.88 billion in net profit for the first quarter, increasing from Bt3.62 billion last year. While TMB Bank enjoyed a net profit of Bt2.12 billion in the first quarter of last year, this past quarter's net results nearly disappeared at Bt158.55 million. BankThai reported a year-on-year surge of 25 per cent in its first-quarter net profit to Bt378 million. The bank said it had set aside Bt300 million in provisions for doubtful loans, which is Bt270 million more than provisioning in the first quarter last year. Tisco Bank said its unreviewed consolidated net profit for the first quarter was Bt355.84 million, down 34.6 per cent from Bt544 million in the same period last year. Kiatnakin Bank's loans for the first quarter of the year grew by 5-10 per cent year on year, accounting for net lending of Bt2 nillion-Bt3 billion. Loan growth in the quarter was mainly driven by auto loans, which were up by about Bt5 billion, president Tawatchai Sudtikitpisan said. According to the Bank of Thailand, despite weakening credit growth, commercial banks are likely to maintain their profitability this year and could even see their loans jump by 8-10 per cent if economic expansion and inflation meet their respective targets of 4-5 per cent and 3-4 per cent. Deputy governor Bandid Nijathaworn said bank earnings were cushioned from decelerating loan growth by four factors. Most banks have changed their strategy to focus on high margin businesses, such as retail, consumer and SME loans. They have kept their operating expenses to total income down quite well, marking 57.1 per cent last year. The have built up their fee-based business, increasing by 13.7 per cent last year. And they have ratcheted down interest rates on time deposits in the face of high excess liquidity. That has reduced their funding costs. The three-month deposit rate of the five largest banks averages only 3.55 per cent, against their minimum lending rate of 7.6 per cent.
Anoma Srisukkasem, Somruedi Banchongduang The Nation
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