BBL expects loan growth to maintain momentum

Bangkok Bank expects further loan growth after the 9.1-per-cent expansion in 2012, which pushed up its net profit to Bt33 billion.

"For 2013, the bank expects loan growth to continue, with loan demand benefiting from expanding private-sector investment, supported by the government's infrastructure projects and preparation by all sectors of society for the Asean Economic Community," said Bangkok Bank president Chartsiri Sophonpanich.

The government plans to submit a Bt2.27-trillion borrowing bill for the Cabinet's approval on February 5. This will cover seven-year investment plans, mostly in infrastructure.

The largest Thai bank yesterday reported that its net profit for 2012 increased by Bt5.7 billion, growing 20.8 per cent year on year to Bt33 billion. It witnessed loan growth in all segments, from corporate and SME (small and medium-sized enterprises) to retail.

At the end of the year, its outstanding loans totalled Bt1.6 trillion, up 9.1 per cent year on year to Bt134 billion. Net interest income rose by Bt2.3 billion, or 4.3 per cent, to Bt55 billion while non-interest income expanded by Bt920 billion.

"We registered positive loan growth in 2012, exceeding our targets in many segments, most notably corporate and SME lending. We achieved this by taking very good care of our customers and staying close to them, allowing us to understand their needs and support them appropriately," Chartsiri said.

Despite the loan expansion, non-performing loans (NPLs) decreased to Bt42.3 billion, or 2.3 per cent of outstanding loans, compared with 2.7 per cent in the previous year. Loan-loss reserve coverage was also raised to 206.9 per cent of NPL value.

The bank saw a 15.5-per-cent increase in deposits, by Bt246.8 billion, to Bt1.8 trillion. This lowered its loan-to-deposit ratio in the year from 92.6 per cent in 2011 to 87.4 per cent. However, interest expenses on deposits rose by Bt9.1 billion year on year.

Net interest margin declined from 2.76 per cent in 2011 to 2.55 per cent in 2012, due largely to rising interest expenses on deposits from the continuous deposit campaigns in 2012 and higher contributions to the Deposit Protection Agency and the Financial Institutions Development Fund.

The bank's capital adequacy remained strong. With the inclusion of net profit for the second half of 2012, the total capital adequacy ratio was 17.2 per cent, while the Tier 1 capital ratio was approximately 12.8 per cent.