Bangkok--23 Jan--Bangkok Bank
Net profit up 11.2%
Loan growth of 17.1%
Deposits up 13.9%
Bangkok Bank and its subsidiaries reported a record net profit of Baht 27.3 billion for 2011, an increase of Baht 2.7 billion or 11.2 percent from the previous year. Profit before provisioning and tax was Baht 46.2 billion, Baht 2.3 billion or 5.2 percent higher than 2010.
Bangkok Bank President Chartsiri Sophonpanich said: “The bank performed well in 2011 despite the external volatility as a result of Europe’s financial crisis, the continued high levels of competition in the banking sector, and the adverse impact on the local economy from severe flooding in the latter part of the year.”
“Lending was 17.1 percent higher than the previous year, rising Baht 214.3 billion to Baht 1,470.4 billion at the end of December 2011. The main drivers of this strong growth were demand for loans to meet working capital requirements and capital expenditures for business expansion. Loans in the fourth-quarter rose by Baht 69.5 billion, or 5.0 percent, from the previous quarter, as a result of seasonal demand for working capital from various industries across the agricultural, services and manufacturing sectors, as well as demand for loans to support rehabilitation and reconstruction after the widespread flooding”
The bank still maintained the high quality of its loan portfolio with strong loan growth in 2011. Non-performing loans at year-end were Baht 42.6 billion or 2.7 percent of total loans, compared with Baht 45.6 billion or 3.0 percent at the end of 2010.
Bangkok Bank always prepares for future uncertainties — with consistent provisioning expenses, prudent liquidity management and by maintaining adequate capital ratios.
Provisioning expenses for the year were Baht 12.0 billion. The bank set aside provisioning expenses of Baht 7.0 billion in the fourth quarter, in line with the Bank’s conservative and prudent approach. This resulted in Baht 84.7 billion in loan-loss reserves, representing a loan-loss reserve coverage ratio of 199.0 percent, compared with 158.9 percent a year earlier.
In terms of liquidity management, as at December 31, 2011 total deposits were Baht 1,587.8 billion, Baht 193.4 billion or 13.9 percent higher than a year earlier due to the success of deposit product offerings that matched customer needs, backed by an extensive nationwide branch network. The loan-to-deposit ratio was 92.6 percent at year-end, compared with 90.1 percent at the end of 2010.
In terms of capital, with the inclusion of net profit for the second-half of 2011, the bank’s Tier 1 capital ratio was approximately 13.2 percent, comfortably higher than the Bank of Thailand’s requirement of 4.25 percent of total risk assets, while total capital adequacy ratio was at 16.3 percent. Shareholders’ equity as of December 31, 2011 was Baht 243.8 billion, representing 11.6 percent of total assets.
In 2011 total operating income was Baht 82.2 billion, an increase of Baht 6.4 billion or 8.4 percent from the previous year, most of which came from an increase in net interest income of Baht 7.1 billion or 15.5 percent. Net interest margin for the year 2011 increased to 2.76 percent from 2.64 percent a year earlier due to the strong loan growth and upward trend of interest rates.
Net fees and service income increased by Baht 844 million or 4.9 percent, mostly in fees from credit cards, guarantee and aval services, electronic transactions, and payment services. Gains on investments decreased by Baht 2.3 billion due to the one-off profit in 2010 from the sale of the bank’s stake in Asia Credit Bank.
Total operating expenses in 2011 were Baht 36.1 billion, Baht 4.1 billion or 12.7 percent higher than in 2010, mainly due to an increase in personnel expenses. In the fourth quarter these expenses increased by Baht 637 million or 14.2 percent from the previous quarter, after one-time special payments were made to staff to alleviate the burden of the flooding and special salary increases were effected in line with changing market trends. Other expenses in the fourth quarter rose by Baht 1.4 billion from the last quarter, mostly due to marketing expenses and donations for flood victims. As a result, the cost-to-income ratio for the full year stood at 43.8 percent compared with 42.2 percent in 2010.
“The Thai economy in 2011 was adversely impacted by the severe flooding in the fourth quarter. Backed by its strong fundamentals, however, the outlook for the Thai economy in 2012 is for reasonable growth, supported by demand for loans to support the rehabilitation and reconstruction in the first half of the year. Nevertheless, the prevailing uncertainties in the Eurozone debt crisis might lead to volatility in both the world and local economies. The Bank will continue to conduct its business and manage risks with care and prudence,” said Mr. Chartsiri.