TMB net profit slumps while Tisco's jumps

TMB Bank's net profit for 2012 was down from the year before because of extra loan provisions, while Tisco Financial Group showed a higher net profit thanks to the robust sales of automobiles across the country.

TMB and Tisco are the first two banks to announce their financial performance for 2012.

TMB reported that net profit was Bt1.605 billion, down from Bt4 billion in 2011. It noted in its filing to the Stock Exchange of Thailand yesterday that the bank and its subsidiaries recorded the highest pre-provision operating profit in its history at Bt10.44 billion.

Improvements in core operating performance was backed by a 16.94-per-cent increase in operating revenue, which was driven by both interest and non-interest income. Costs were well managed, growing only 4.6 per cent, which resulted in an improved cost-to-income ratio.

With the strong operating profit, the bank took the opportunity to clean up remaining legacy of non-performing loans by selling Bt5.7 billion worth, while making extra provisions of Bt528 billion. As a result, the bank and its subsidiaries reported net profit of Bt1.605 billion.

TMB's consolidated gross loans increased by 14 per cent from 2011, driven by performing-loan growth of 17 per cent offset by a 26-per-cent reduction in NPLs reflecting improved quality of its balance sheet. Deposits grew by 9.7 per cent backed by expansions in retail accounts.

Liquidity remains comfortable, as reflected in a loan-to-deposit rate of 91.2 per cent. The bank has retained a strong capital base with a capital adequacy ratio of 18.2 per cent and Tier 1 of 11.1 per cent.

Tisco recorded net profit of Bt3.705 billion against Bt3.26 billion in 2011. The higher profit was contributed by a 23-per-cent increase in interest income in line with loan growth of 34.2 per cent, particularly retail lending, including instalment loans.

Outstanding instalment loans increased by 31 per cent to Bt163.70 billion thanks to business expansion into captive brands, pent-up car demand during the last quarter of 2011 due to the flood crisis, and the government's excise-tax-rebate scheme for first-time car buyers.

However, loan spread declined to 3 per cent compared with 3.7 per cent in 2011 because of the furious competition for deposits.