• 
• 

Published on October 3, 2007

BAY is expected to post a third-quarter net profit of Bt2 billion, up 8.5 per cent year on year. This is due mainly to the absence of provision expenses, as provision for this year was sufficiently set in the second quarter; and a lower effective tax rate, because of its tax shield from last quarter's net loss.

The broker still expects a net loss for the bank's full-year result, but the exact figure should be better than the broker's current forecast, given less provision in the second half and the lower effective tax rate.

The bank's management emphasised that the first priority this year was to build a strong foundation by cleaning up non-performing loans (NPLs), training personnel and setting up an efficient core banking and risk-management system.

Therefore, organic growth could remain weak this year, but it would be offset by inorganic growth. Leapfrog growth is expected when the acquisition of GE Capital Auto Lease is completed this year.

Going forward, management has indicated further acquisitions are still an option, considering its strong capital at present.

BAY plans to cut its consolidated gross NPLs to Bt63 billion at the end of the year, down from Bt74.6 billion in June. This implies an NPL ratio of 13 per cent, down from 15.8 per cent.

An NPL write-off is expected this year, with the interested buyer a foreign bank.

The Nation