Ten of the country's listed banks recorded net profit in 2013 of Bt167.48 billion, up 22.47 per cent from Bt136.75 billion in 2012, led by Siam Commercial Bank, Kasikornbank and Bangkok Bank.
SCB reported net profit of Bt50.23 billion, KBank Bt41.32 billion and BBL Bt35.90 bil?lion.
The seventh-largest bank by assets, TMB, topped its peers by recording the highest net-profit growth of 355 per cent. However, TMB Bank also reported loan growth of just 5.1 per cent, lowest in the banking industry. The reduction of loan-loss provisions and healthy growth in interest and non-interest income were the key drivers of TMB’s profit in 2013.
Thanachart Capital, the parent company of Thanachart Bank, reported the second-high?est net-profit growth of 67.51 per cent to Bt9.23 billion. The sale of Thanachart Life Assurance to Britain’s Prudential was the key driver.
Bank of Ayudhya (BAY), the major player in consumer finance and the top performer in 2012, was the only bank to witness lower net profit last year, dropping by 4.1 per cent to Bt14.02 billion.
BAY and Tisco Financial Group both set higher loan-loss provisions than expected, according to Asia Plus Securities analyst Usanee Liurut.
Auto loans, especially for used cars, affect?ed the overall profit of the banking industry as some banks set extra loan-loss provisions as countercyclical measures.
In 2012, the government’s first-car |tax-incentive scheme made auto lending |a key driver of loan growth and bank |profits. That year, the 11 listed banks re-corded net profits of Bt163.12 billion, up |by 30.05 per cent from Bt125.43 billion |in 2011, led by SCB, KBank and BBL.
But last year the three banks that are major players in this segment faced rising non-per?forming loans (NPLs), mainly from used-car financing. A sharp plunge in the prices of used cars caused losses in their repossessed-vehi?cle inventory.
Thanachart Bank, the biggest hire-pur?chase lender, reported an NPL rate last year of 4.49 per cent, up from 4.32 per cent in 2012.
BAY, the second-largest lease-to-own play?er, saw NPLs rise to 2.6 per cent from 2.4 per cent in 2012, while Tisco’s NPLs climbed to 1.7 per cent from 1.25 per cent the previous year.
Usanee said extra loan-loss provisions had dampened the net profits of the banking indus?try, but the high provisions were regarded as a countercyclical tool to deal with the eco?nomic uncertainties looming in 2014.
She said the net profits of the banking industry in the current quarter would drop from the last quarter because the sector would not reap profits from investments such as the Vayupak Fund, as they did in the fourth quar?ter of 2013.
The first quarter of the year is not the lend?ing season, so loan growth in this period will drop from the last quarter, which is the peak season of loan growth. Reduced expenses in the first quarter, however, could help carry the banking sector’s profitability.