Bangkok--18 Oct--Siam Commercial Bank
The Siam Commercial Bank PCL reported third quarter net profit of Baht 12.7 billion, a 26% increase from the third quarter of 2012. The substantial year-on-year increase in net profit was the result of higher net interest income and net fee and insurance premium income as well as significantly higher dividend income and net trading and FX income. These gains were partially offset by a significant increase in provisions to enhance its counter-cyclical buffer against future uncertainties, while loan portfolio quality remains stable.
Third quarter operating profit (excluding impairment loss and/or provisions on loans and debt securities, income tax and non-controlling interest) increased by 30% year-on-year to Baht 19.8 billion, due to the substantial increases in both net interest income and non-interest income.
For the nine month period ending on September 30, 2013, the Bank reported net profit at a record high of Baht 38.5 billion- a 28.6% increase from the same period in 2012.
Commenting on the record third quarter profit, Dr. Vichit Suraphongchai, Chairman of the Bank’s Executive Committee, stated that “for much of this year, the global economic landscape has been challenging for the financial markets.. Yet, despite the challenges we have faced along with the rest of the financial community, the Bank has been able to chart a relatively smooth course and report record net profit, high income growth, stable loan quality with higher provisions and a solid capital base. While we are far from certain of what may lie ahead, we stand better prepared to face future uncertainties than at any point in our 108 year history. It is this agility and strength that characterizes the Bank today and differentiates it from most other market participants”.
Net interest income rose by 16.5% year on year in the third quarter. This increase was the result of robust loan growth of 12.7% year-on-year together with an increased proportion of higher yield SME and retail loans in the Bank’s loan portfolio.
In the current quarter, non-interest income increased by 34.6% year-on-year. This very substantial increase was the result of an exceptional dividend from one of the bank’s equity investments, continued growth in net fee and insurance premium income, and higher net trading and FX income.
Given the exceptionally strong quarterly results, the Bank set aside additional prudential provision of Baht 1.5 billion to provide a further counter-cyclical buffer. This lifted the aggregate provisioning in the third quarter to Baht 4.2 billion. At the same time, the NPL ratio fell from 2.13% at end of 2012 to 2.08% at end of September 2013. With the higher provisions, the coverage level for NPLs increased from 144.8% at end of last year to 151.5% at the end of September 2013.
“We are pleased that for some time the Bank has delivered the highest net profit across the banking sector in Thailand” notes the president of the Bank, Kannikar Chalitaporn. She adds that “this fact attests to the strength and sustainability of our banking franchise today. More understated but far more important are the strength of our deep customer relationships and the quality, acumen and loyalty of our employees. In my view, these two attributes are at the core of our competitive ability - both today and in the years to come”.