Bangkok--19 Jul--Siam Commercial Bank
SCB announced record year-on-year second quarter net profit at Baht 12.6 billion (compared to Baht 9.8 billion in the same period last year) — setting a new high for the second quarter results and 28.5% year-on-year profit growth. At the same time, Total income reached a new quarterly high of Baht 29.8 billion, up 18.8% year-on-year. The high profitability was driven by continued growth in both Net interest income (up 18.1%) and Non-interest income (up 20.0%). At the same time, loan quality was stable with the NPL ratio at a low of 2.1%.
The net profit for the first-half of 2013 was Baht 25.8 billion, representing an increase of 29.7% over the same period last year. This significant uplift to profitability was mainly through net interest income and non-interest income growth at 19.8% and 20.8% respectively.
Commenting on the second quarter results, Dr. Vichit Suraphongchai, Chairman of the Bank’s Executive Committee, stated that “the continued growth in total income and net profit attests to both the sustainability of the Bank’s performance and competitiveness of its operating platform. To a large extent this achievement underscores the successful outcome of the Bank’s ongoing, multi-year, transformational change program.”
Net interest income grew by 18.1% year-on-year. This was the result of the 16.8% year-or-year loan growth, the higher interest income through the gradual portfolio shift towards the high yielding loan segment and a bigger portfolio of investments. Although the loan growth of the Bank has been broadly based, the higher-than-market growth has arisen mainly from the Bank’s broad strategy to gain market share in the SME, Mortgages and Auto Loans segments of the market.
Non-interest income grew by 20.0% year-on-year driven primarily by income from net insurance premiums (up 18.0% year-on-year), net fee and services income (up 12.6% year-on-year), and Net trading and FX income (up 67.6% year-on-year). This growth is in line with the Banks’s business strategy to emphasize fee-income compared to interest income.
Loan quality continued to be sound and the low NPL ratio of 2.1% of the previous quarter was maintained in this quarter. Nonetheless, as a prudential measure against future economic uncertainties, the provisioning level was increased in the current quarter from about Baht 2,550 million to Baht 2,700 million Also, the NPL coverage ratio remains at a post Asian financial crisis high of 144.9%.
Khun Kannikar Chalitaporn, President of the Bank, noted that “The overriding reason why the Bank is able to sustain industry leading performance, quarter after quarter, is because of the spirit, competency and dedication of its employees in pursuit of the highest levels of customer engagement. It is through this drive that we deliver above-market shareholder returns today and prepare to face future challenges. As a result, I am confident that, despite the economic uncertainties that appear to lie ahead, we will continue to be the Bank of Choice in Thailand for our diverse stakeholders in the years ahead."