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Published on April 22, 2008

The Nation

Siam Commercial Bank (SCB), Thailand's oldest bank, announced a record Bt6.7 billion for its consolidated first-quarter net profit, up 83.5 per cent year on year.

SCB said the jump was driven by dramatic growth made possible by its universal banking model, higher productivity, cost savings and a one-time gain from investments.

Its non-performing-loan resolution also beat expectations, reflecting significant qualitative improvement in its overall lending portfolio.

Its stock price fell 2.13 per cent to Bt92 in yesterday's trade.

Bank of Ayudhya (BAY) yesterday announced a first-quarter net profit of Bt1.03 billion, down 6 per cent year on year but up 7 per cent quarter on quarter.

BAY recorded an operating profit of Bt2.6 billion, up 67 per cent quarter on quarter, but the amount did not make provisions for doubtful accounts. After setting aside Bt1.6 billion in provisions for bad loans, the bank recorded a net profit of Bt1.03 billion.

Most large commercial banks have reported higher-than-expected first-quarter earnings, due mainly to higher net interest income (NIM) and unexpected non-interest income, including investment gains and fee income.

Surprises at Krung Thai Bank (KTB) came from higher-than-expected NIM and a Bt1.5-billion gain from investments. Its net profit of Bt4.1 billion was down 6.1 per cent year on year but up 1,079 per cent quarter on quarter.

The result was 27 per cent above market expectations.

KTB recorded a 4-per-cent net interest margin in the first quarter, up from 3.7 per cent in the same period last year.

Non-interest income was a big surprise, rising 51.6 per cent year on year, driven by an unexpected huge gain on investment of Bt1.5 billion, up from Bt155 million in last year's first quarter and Bt100 million in the fourth quarter.

KGI Securities (Thailand) recommended "outperform", with target price of Bt13.40 a share for next year.

Yesterday, KTB closed at Bt10.90, down 0.91 per cent from last Friday.

First-quarter earnings of Bt5.6 billion for Bangkok Bank (BBL) were also at the top end of expectations. That amount represented a rise of 21.5 per cent year on year and 37.6 per cent quarter on quarter, due mainly to higher-than-expected non-interest income that rose 19 per cent year on year and 23 per cent quarter on quarter. Its performance was helped also by strong fee income and a gain on foreign exchange.

ING recommended "outperform" for BBL shares, with a target price of Bt165 apiece this year.

BBL closed at Bt139 yesterday, down 1.42 per cent.

Kasikornbank was another bank announcing higher-than-expected results, at Bt4.44 billion, up 14 per cent year on year and 22 per cent quarter on quarter. The result was higher than expected, due to gains from bonds and slightly lower operating costs.

The main surprises were stronger-than-expected loan growth in the first quarter, at 18.5 per cent year on year and 4.9 per cent quarter on quarter, along with Bt778 million in investment gains.

SCB Securities maintains its "buy" recommendation on Kasikornbank shares, leaving its target price of Bt106 apiece unchanged.

It closed at Bt91 yesterday, down 2.15 per cent.

TMB Bank's results also beat market consensus by 60 per cent at Bt1.6 billion, jumping 622 per cent year on year. The result represented a sharp turnaround from a huge loss in the previous quarter. Helping the bank was higher-than-expected gains on investment and lower-than-expected provisions for expenses.

ING recommended "neutral" on TMB shares, with a target price of Bt1.40 apiece.

TMB Bank closed at Bt1.52 yesterday, up 6.29 per cent.