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While KTB saw a huge drop in its net profit year on year, BAY reported a net loss.

KTB reported a net profit of Bt6.11 billion for last year, down 55.7 per cent from Bt13.79 billion in 2006. The country's largest state-owned bank made a provision of Bt19.5 billion for loan loss, of which Bt3 billion was a provision for CDO depreciation. KTB has total CDO investments of US$160 million (Bt5.29 billion).

KTB president Apisak Tantivorawong said the large amount of provision had severely hurt its net profit. However, the bank's earnings this year are likely to be better than last year, he said. This would be supported by aggressive business expansion, while provision for loan loss would be back to normal.

BAY president Tan Kong Koon said the bank's net loss last year was due mainly to a high provision for loan loss. He said the bank's operations had generated a net profit of Bt8.5 billion before the provision.

The bank showed a net loss of Bt3.99 billion last year, compared with a net profit of Bt1.66 billion in 2006. BAY set aside a huge extra provision of Bt11.5 billion for loan loss last year. Of that provision, Bt640 million was for investment in CDO and structured notes under mark-to-market method. The bank has total CDO investments of $85 million, accounting for 0.4 per cent of the bank's total assets.

Meanwhile, mid-sized Siam City Bank reported a net loss of Bt1.92 billion for last year, compared with a Bt4.25-billion net profit in 2006. The bank's results were also affected by the loan-loss provision and a change in the accounting method, in keeping with Bank of Thailand regulations, said president Chaiwat Uthaiwan.

Bangkok Bank showed a net profit of Bt19.10 billion for last year, up 13.3 per cent from 2006. The improved results came on the back of 8-per-cent loan growth.

Siam Commercial Bank reported a net profit of Bt17.35 billion, up 31 per cent from 2006. The major driving force was continued growth, both in interest and dividend income, up 20.3 per cent and 15.2 per cent, respectively.

Somruedi Banchongduang

The Nation