Bangkok--16 Jan--Siam Commercial Bank
Siam Commercial Bank (SCB) announced today a net profit of Baht 50.2 billion for 2013, a 28% increase from 2012. The substantial increase in net profit was attributed to higher net interest income and solid growth in non-interest income, including net fee and insurance premium income. These gains were partly offset by substantially higher prudent provisions in anticipation of the potential adverse turn in the economic cycle although, at this time, loan quality remains relatively stable. Also, SCB reported fourth quarter profits of Baht 11.8 billion, a 26.3% increase compared to the same quarter last year.
Commenting on the record 2013 results, Dr. Vichit Suraphongchai, Chairman of the Bank’s Executive Committee noted that “while the 2013 results speak for themselves, we are already looking to 2014, when the decelerating Thai economy appears further hamstrung by the uncertain global economic outlook as well as the on-going domestic political turmoil . This bleak economic landscape has caused us to adapt our tactical initiatives to respond to the difficult challenges that lie ahead in 2014 with agility and speed. This rapid flexibility will allow us to refocus and better position our franchise and, concurrently, continue with our more strategic and deeper-rooted Change Program initiatives in anticipation of the more optimistic longer term outlook for our economy”.
Net interest income rose by 17.6% to Baht 73 billion in 2013. The increase in interest income was primarily a result of the loan growth of 12.1%, a larger component of higher yield loans and a higher amount of liquid assets. Interest expenses increased mainly from the higher volume of deposits (+12.9% over 2012).
Non-interest income rose by 23.6% to Baht 51 billion in 2013, which was the result of 16.4% growth in net fee and insurance premium income, exceptional dividend income, a large investment gain, and a 20.9% increase in net trading and FX income.
The strong operating results were tempered by substantial additional loan impairment provisions of Baht 13.6 billion in 2013, compared to Baht 9.4 billion in 2012; an increase of Baht 4.2 billion or 45.2%. Although the NPLs appear to reflect an increasing trend, the ratio of NPL-to-loans was relatively flat, year-on-year, at 2.14% at end-December 2013, while the coverage level for NPLs has increased from 144.8% at the end of 2012 to 150.8% at the end of December 2013.
Commenting on the near term priorities, Khun Kannikar Chalitaporn, the President of SCB, commented that “as we look ahead, beyond these exceptional results, we will adopt a four pronged thrust in 2014: reduction in the cost of deposits to bring them in line with our competition; containing our operating expense growth; growing our fee and insurance premium income; and building the capabilities of some of our key customer-facing personnel. While our management and staff can be justifiably proud of the performance milestone we have achieved in 2013, we need to continue to excel at all levels to achieve our long standing vision of being ‘the bank of choice’ for our customers, shareholders, employees and the community”.