SCB says Q2 results unlikely to match Q1

President and CEO Kannikar Chalitaporn said yesterday the bank's results in the first quarter were excellent and the bank is trying to continue doing well - but the best performance possible in the second half would still not beat the first half.

However, lending was expanding steadily and was well along the road to the growth target of 12-15 per cent for the whole year.

"Loan growth is better now because we don't extend low-yield loans, but we want loans such as home loans. There are more people interested [in mortgage loans] after the mortgage registration fee was cut. Our loans are gradually increasing and the growth rate is higher than last year. But quarter on quarter, there is a seasonal factor to consider," she said.

The bank's margin will shrink because it has issued Bt20 billion in debentures paying 4.75 per cent, bringing its cost of funds up, she said. Competition is fierce, but the bank expects to get its margin to settle down at 3.6-3.7 per cent for the year.

The bank will focus on multiplying fee income by 39-40 per cent this year. Generating income from fee-based services is preferable, as there are no burdens like bad loans and funding costs.

In the first quarter, fee income was 36 per cent higher, but this quarter will probably see a slower rise of over 20 per cent from trade finance, bancassurance[selling of insurance and banking products], mutual funds and credit cards.

Siam Commercial Bank's non-performing loans are at 4.95 per cent of its total loans. The bank plans to sell NPLs for Bt2-3 billion in the second half.