Bangkok--21 Jan--Bangkok Bank
- Net profit up 19.9%
- Loan growth of 9.9%
- Non-interest income up 26.3%
Bangkok Bank and its subsidiary companies have reported a net profit of Baht 24.8 billion for 2010, 19.9 percent higher than in 2009. The increase was due mainly to an improvement in core operations as well as revenue received from special gains from investments. Loan growth in the fourth quarter was particularly impressive.
The bank’s operating results improved as its customers benefited from the sharp upturn in the Thai economy. Contributing to the result were the bank’s strong fundamentals and financial strength.
Bangkok Bank President Chartsiri Sophonpanich said, “Throughout 2010 we concentrated on working closely with our customers, and also on improving collaboration among various business units within the bank, with customer satisfaction a key goal. This approach allowed us to better identify customer needs and help them better plan and execute their strategies. We expect the momentum gained in the final quarter of the year to continue in 2011 and we are looking forward to further growth and success.”
The bank’s lending grew by Baht 112.8 billion or 9.9%, with growth in the fourth quarter alone of Baht 89.6 billion. While the fourth quarter is typically the period when demand for working capital from the agro-industry sector is at its greatest, the bank also experienced strong loan demand for business expansion, both domestic and overseas, across a wide range of industries. This trend is expected to continue into 2011 and Bangkok Bank has prepared itself well to rise with this investment cycle, with sufficient liquidity and strong capital on hand to meet further increases in demand for loans.
The bank’s liquid assets — comprising cash, interbank and money market funds — stood at Baht 386.0 billion at the end of the year. Deposits at December 31, 2010 were Baht 1,394.4 billion, 2.5% higher from 2009. The loan-to-deposit ratio was 90.1 percent, well below the industry average.
The bank maintained its high asset quality with non-performing loans (NPLs) continuing to fall. NPLs of Baht 45.6 billion at year-end represented 3.0 percent of total loans, compared with Baht 55.6 billion or 4.4 percent a year earlier, due to successful debt restructuring and the stronger economy. The bank will continue to reduce NPLs in 2011 while setting aside prudent provisioning expenses. Loan-loss
reserves at year-end were Baht 72.5 billion higher than the previous year’s Baht 65.1 billion, giving a healthy ratio of loan-loss reserves to NPLs of 158.9 percent.
Net interest income rose by Baht 3.0 billion for the year despite net interest margin holding steady at 2.95 percent.
Non-interest income increased by Baht 7.1 billion, due mainly to the gain in special income from sales of foreclosed properties and the sale of the bank’s stake in ACL Bank.
Fee income continued to grow, rising by 9.0 percent with contributions from loan-related fees, credit cards, payment services and bancassurance. In the year ahead, the bank will continue to drive growth in these areas, and also in investment banking and cash management.
The bank kept its operating expenses well under control with a small increase of 7.2 percent year-on-year. With revenues growing faster than expenses, cost-to-income ratio fell to 49.2%.
The bank maintained its solid capital position. With the inclusion of net profit for the second half of 2010, the bank’s capital adequacy ratio at year-end would have been approximately 17.0 percent with a Tier 1 capital ratio of approximately 13.4 percent. The bank’s financial strength means it is well positioned to support the greater financial needs of existing and new customers.
Shareholders’ equity at year-end was Baht 231.3 billion with earnings per share of Baht 12.9 and book value per share of Baht 120.8.