Bangkok--20 Oct--Siam Commercial Bank
In its 3rd quarter results announced today, SCB reported, in an improving economic climate, a resurgence of lending across all business segments and loan growth for the quarter of 9.8% yoy. Also, it reported a significant improvement to the loan portfolio quality as NPLs fell to 3.98% - the lowest level in over a decade. Importantly, it announced a 3rd Quarter net profit of Baht 6.5 billion, up 24.6% yoy and 21.9% qoq. The high level of net profit was driven by solid business growth on all fronts. Finally, the Bank confirmed that it is on track to meet 2010 performance targets it announced at the start of this year.
Commenting on the solid results Dr. Vichit Suraphongchai, Chairman of the Bank's Executive Committee noted that “the strong results underscore the ability of the bank to establish an effective set of business strategies and successfully execute them. These capabilities encapsulate the agility of the Bank to successfully navigate through an increasingly hazy landscape, while identifying and pursuing opportunities that provide avenues for sustainable future growth. In essence, these core capabilities mark a successful outcome of the Bank's deep-rooted transformational Change Program.”
The impressive results were driven by three core elements:
First, in a recovering economic environment, the Bank's lending increased by 9.8% over the past year. The Bank noted that it had achieved solid loan growth in almost all business segments during the quarter, particularly in the small SME and auto-lending markets which had been identified for market share growth at the start of the year.
Next, asset quality improved as NPLs fell to 3.98% - the lowest level in over a decade, and the NPL coverage ratio moved beyond 100% for the first time. This continuing quality improvement reflects both the recovering economic climate and the strength of the Bank's credit underwriting practices and risk management framework.
Third, its net profit improved dramatically by 24.6% yoy and 21.9% qoq. The main contributions were from: (i) the growth of its Net Interest Income (7.9% yoy) on the back of higher margins and loan portfolio growth; (ii) the dramatic increase to Non Interest Income by 29% yoy as the Bank's fee income continued to grow, particularly from its card business, bancassurance and loan related activities, as well as from a substantial one-time gain from the sale of a non-core equity investment. The Bank highlighted that it has increased the fee proportion derived from its corporate and SME businesses, in line with its business strategy.
Finally, the Bank confirmed that it is on track to meet its 2010 targets published at the start of the year, with ROE of between 16%-18%, loans growth of between 7-10%, and Fee Income Growth of 15% or higher.
Khun Kannikar Chalitaporn, President of the Bank, stated that “ the solid results reflect, in no small measure, the ability of the large and growing workforce of the Bank to work together, across its business unit divide, to overcome challenges and exploit opportunities in a very challenging market environment”. In her view, “it is this spirit, more than anything else, that enables our employees to better support customers and consistently deliver compelling shareholder value.”