Bangkok--20 Jul--SCB
Following on from an industry record setting first quarter net profit, SCB announced second quarter net profit of Baht 8.1 billion — a 53 % year-on-year increase — setting a record high for the second quarter. This substantial increase in profitability was driven by: higher interest income on the back of 21.1% year-on-year loan growth; continued growth in non-interest income (+36.4% year-on-year), particularly from insurance underwriting; and steep improvements to its overall asset portfolio quality as non-performing loans reached a new low of 2.69% post the 1997 Asian economic crisis. (For the first half of 2011, the Bank recorded a net profit of Baht 21.18 billion, an increase of 81.2% year-on-year from the first half of 2010.)
Commenting on the 2nd quarter results, Dr. Vichit Suraphongchai, Chairman of the Bank’s executive committee, noted that “the continued high level of profitability underscores that SCB has scaled to a new performance plateau on the back of a clear vision and effective business strategies. Also, these results reflect the alignment of SCB’s current business model to the opportunities available in the emerging economic landscape and the unique competitive edge that SCB has attained by implementing the Kingdom’s most complete universal banking model”. He added, “the outstanding results, over two competitive quarters, provide a foretaste of the Bank’s ability to generate high profitability in the future”.
Net Interest Income rose by 29.7% to a record Baht 12.6 billion, from Baht 9.7 billion in the second quarter of 2010. The main reason for this sharp increase was the buoyant loan growth of 21.1% year-on-year. To a large extent, the above market growth trend is a reflection of the Bank’s ability to increase its market penetration in three specific segments (SME, large corporations and automobile loans segments) above and beyond normal business as usual increases.
Non-Interest Income rose 36.4% compared to the second quarter 2010. This increase was driven largely by the sharp increase in insurance premium income following the acquisition of substantial additional equity in SCB Life in the preceding quarter.
Finally, the Bank recorded yet another substantive improvement in loan quality as Non-Performing Loans reached a new low of 2.69% post the 1997 Asian economic crisis. Concurrently, Loan loss reserves increased from 110.6% to 114.5% and new NPL formation fell to a sharply lower level of 0.13% in the quarter.
The Bank President, Khun Kannikar Chalitaporn, commenting on the results stated that “the strong growth in business volume and profitability across all business units (wholesale, SME, retail, and key subsidiaries) highlights both the balance and continuity of this high performance level. Further, these results are the tangible outcome of delivering value to all our customers through highly engaged staff collaborating across multiple lines of business”.
Siam Commercial Bank PCL is a leading universal bank in Thailand. It was established by Royal Charter in 1906 as the first Thai Bank and, as at June 30, 2011, had the highest market capitalization among Thai Financial Institutions (Baht 377 billion). It has the largest branch (1,037), exchange booth (106), and ATM (8,169) network in the country, attesting to its dominant position in the retail financial services marketplace. It has a diverse range of Corporate, SME, Private, and Retail customers nationwide, and has an asset size of Baht 1,686 Billion. Further information is available on the Bank's web site at www.scb.co.th.
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