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Published on October 20, 2007

Two quasi-state-owned and state-owned banks - TMB Bank and Krung Thai Bank - were the worst performers in the third quarter this year, while privately owned institutions showed improved financial results, according to preliminary reports.

TMB Bank, of which the Finance Ministry owns 26 per cent, announced a net loss of Bt2.54

billion for July through September, compared with a net profit of

Bt1.29 billion in the corresponding period last year, according to a filing with the Stock Exchange of Thailand (SET).

Higher provisions and losses from investments were the main culprits in the poor earnings.

Late last night, the third-quarter earnings of Siam City Bank, United Overseas Bank (Thai), BankThai and Thanachart Bank were not yet available.

Krung Thai Bank, Thailand's largest state-owned bank, reporting the bank's unreviewed third-quarter financial statement, saw its net profit sharply plunge by 83.51 per cent year-on-year from Bt5 billion to Bt825.10 million.

The decline in earnings could be attributed to higher provisions, the bank said in a statement. The bank, however, did not provide a consolidated financial statement for the third quarter.

The bank set aside Bt6.60 billion to cover potential losses from bad loans, up from Bt1.90 billion in the third quarter of last year, to comply with new international accounting standards known as IAS 39.

At the other end of the scale, Bank of Ayudhya performed best among its industry peers.

Its net profit shot up 54.36 per cent on year, from Bt1.87 billion to Bt2.88 billion. Bank president Tan Kong Khoon said the stunning earnings were attributable to a 6-per-cent year-on-year increase in non-interest income and the absence of provisions.

The bank until the end of this year has no burden to set aside provisions to comply with the IAS 39 standard after it reserved Bt11.8 billion in the first half this year.

Tan admitted that the bank, however, would find it impossible to turn back to net profit this year after it made a hefty net loss in the first half this year, thanks to provisioning. The bank in the first nine months of this year reported a net loss of Bt4.96 billion against a net profit of Bt5.37 billion in the same period last year.

The bank also planned to dispose of Bt25 billion of its Bt75 billion in non-performing loans (NPLs) this year.

Siam Commercial Bank was the second best performer in the quarter, rising 44.31 per cent year-on-year from Bt3.69 billion to Bt5.32 billion.

The continued growth in interest and fee income and the decline in NPLs gave a big boost to the bank's impressive earnings.

Kaitnakin Bank, a small bank, reported a solid third-quarter net profit of Bt580.75 million, up 36.76 per cent from the same period last year.

Another small bank, Tisco Bank, announced its quarterly net profit surged 32.45 per cent to Bt440.23 million in the same quarter.

These results have not yet been reviewed by auditors.

Siriporn Chanjindamanee

The Nation