Bangkok--18 Jan--SCB
SCB announced record (unaudited) net profit for 2010. Lending volumes rebounded in the last quarter, closing with a three-year high loan growth of 12.6% yoy. Loan quality improved markedly with NPL levels at a post crisis low of 3.25% at end 2010, compared to 4.41% in 2009. Finally, net profit rose sharply by 16.6% yoy and reached a historic high of Baht 24,206 million on the back of solid non-interest income growth, as well as margin based income growth
Commenting on these results, Dr. Vichit Suraphongchai, chairman of the Bank’s Executive Committee, noted that “the stellar results were driven by all round growth in the wholesale, SME and retail segments, giving substance to the Bank’s emergence as the dominant universal services Bank in Thailand”. He adds that, “these results were achieved in a year characterized by many uncertainties on both the domestic and international front. As such, these results speak to the underlying resilience of the Thai economy and the deftness of the Bank’s borrowers in all segments of the market to successfully adapt to these winds of change. Too, the results speak to the agility of the Bank to capitalize on near term opportunities while preparing to meet future challenges”.
The Bank comfortably exceeded its loans targets and recorded strong loan growth of 12.6% yoy for 2010. The growth arose from all business segments — Wholesale, SME, and Retail — reflecting the soundness with which the Bank has executed its new strategies announced at the start of the year.
The Bank’s is particularly proud of its sharp improvement in asset quality. The NPL ratio at end 2010 stood at 3.25% compared to 4.41% at the end of 2009 — and is at the lowest post Asian Economic Crises level. Inevitably, the Bank has reduced its provisioning levels - Baht 4,661 million of loan loss provisions in 2010, compared to the Baht 5,605 million provisions set aside in 2009. At the same time, the provisions cover over NPLs stood at 107.5% at end 2010 compared to the 95.4% at end 2009.
Driving the growth in net profit was the sharp rise in non-interest income which rose 20.6% yoy to Baht 32,655 million in 2010 from Baht 27,082 million in 2009. The main factors behind this strong growth were firstly, the continued momentum in fee and service income — both from retail products like mutual funds, bancassurance and cards, and, increasingly, from non-retail products and services. Secondly, the increase was driven by higher gains on investments. At the same time, the increase in net profit reflected the 6% yoy growth in the Bank’s net interest and dividend income. Mainly, this was the result of the sharp drop in interest expense, which fell by a larger magnitude than the decrease in interest income. Also, the Bank reduced its higher cost interest expense from lower levels of short term borrowings at a subsidiary.
The Bank president, Khun Kannikar Chalitaporn, commented that the “higher business volumes and greater profitability, together with better asset quality are indicative of the strong position of the Bank as it starts 2011. We expect to take this momentum to the year ahead and record above market growth in lending and fee based activities in 2011 through deeper engagement with our customers and stronger bonding across our employee base. This ethos of sustaining the highest levels of engagement with our customers and employees, together with effective governance and strategy execution, is ultimately what differentiates the SCB franchise from all others in Thailand”.
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