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Published on January 18, 2008

TMB Bank ended 2007 on a grim note, reporting an unaudited consolidated net loss of Bt22.97 billion for the fourth quarter.

TMB said in a filing with the Stock Exchange of Thailand late yesterday that it had suffered a net loss of Bt43.65 billion for the year, compared with a Bt12.29-billion net loss in the previous 12 months.

The massive loss could be ascribed mainly to higher provisions, as well as goodwill amortisation of the now defunct Industrial Finance Corporation of Thailand and DBS Thai Danu Bank following the recent three-way merger.

The fourth-quarter net loss reported by Thailand's fifth-largest bank slightly beat several brokers' estimates. KGI Securities (Thailand) had forecast that TMB would post a net loss of Bt24.22 billion, assuming that it would book another provision of about Bt25 billion in the quarter. Globlex Securities and SCB Securities predicted that TMB would lose Bt23.85 billion and Bt24.88 billion, respectively.

Meanwhile, Kasikornbank announced that its fourth-quarter net profit had risen from Bt3.43 billion in the same period a year earlier - and Bt3.41 billion in the previous quarter - to about Bt3.63 billion.

The bank earned a net profit of Bt15 billion during the year, compared with Bt13.66 billion in 2006.

"We expect big banks in our coverage, excluding TMB, to report fourth-quarter earnings of Bt18.8 billion, up 189 per cent year on year, due to lower provisioning expenses, expanding net-interest margin, and improved cost-to-income ratios," said KGI Securities.

Besides TMB, banks under KGI Securities' coverage are Bangkok Bank, Krung Thai Bank, Siam Commercial Bank, Kasikornbank, Bank of Ayudhya and Siam City Bank.

"The sector's 2007 earnings are expected to be Bt10.7 billion, down 80 per cent year on year mainly due to higher provisioning and increased operating expenses and extras such as collateral-debt-obligation impairment. Siam Commercial Bank is expect to show the strongest earnings growth, up 35 per cent year on year, followed by Bangkok Bank, up 11 per cent and Kasikornbank, up 8 per cent," the broker said.

Bank of Ayudhya is expected to turn around from a Bt3.7-billion net loss during the fourth quarter last year to a Bt2.07-billion net profit this year, the broker said.

The country's largest state-owned bank is estimated to be one of the best performers among industry peers in the quarter, up 404 per cent year on year and 100 per cent quarter on quarter to Bt2.15 billion. The robust forecast came despite the broker predicting the bank would set aside Bt3 billion as provisioning.

Siam Commercial Bank will deliver 292-per-cent year-on-year growth but a 11-per-cent quarter-on-quarter drop to Bt4.72 billion, the broker said.

Globlex Securities forecast that Bank of Ayudhya's fourth-quarter earnings would swing back into the black, with net profits of Bt1.64 billion.

Krung Thai Bank will be the best-performing bank during the fourth quarter with a 315.88-per-cent year-on-year and 115.38-per-cent quarter-on-quarter increase in net profit of Bt1.77 billion, the broker said.

Globlex is bullish about the banking sector, predicting 2008 earnings will jump almost eightfold from this year on the anticipation of loan growth and lower provisioning.

The Nation