Bangkok--17 Apr--Siam Commercial Bank
Siam Commercial Bank announced today its first quarter, 2014 net profit of Baht 13,129 million, flat year-on-year (and 11.7% higher than the preceding quarter). Despite a sluggish economic environment, the Bank reported year-on-year growth in both net interest income and net fee and insurance premium income. At the same time, in line with its announced strategy, operating expense growth was sharply contained. This improvement was offset by the year-on-year decline in dividend income mainly due to a large exceptional dividend in the first quarter of 2013 as well as the substantially higher prudential provisions in the current quarter. In fact, although the underlying loan portfolio quality remained stable during the quarter, the provisions were 27% higher year-on-year.
Commenting on the results, Dr. Vichit Suraphongchai, chairman of the Bank’s executive committee, noted that “ The solid first quarter results speak to the speed and agility with which the Bank has aligned its strategy to fit the changed market place and meet its customer expectations. Also, the strong results reflect the soundness of the Bank’s core franchise and the effectiveness of its on-going transformational change agenda.”
Net interest income rose by 12.4% year-on-year, primarily as a result of the loan growth of 8.8% over this period, although loans were relatively flat over the first quarter. Also, the Bank befitted from successfully reducing, in line with its announced strategy, its cost of deposits compared to the preceding quarter.
Non-interest income decreased 6.5% year-on-year in 1Q, 2014, which was the result of lower dividend income mainly due to an exceptional large dividend from an investment in the Bank’s equity portfolio, booked in the first quarter of 2013. This reduction was partially off-set by the healthy growth of net fee and insurance premium of 9.1% year-on-year, mainly from premium income and corporate finance fees.
With the steady growth in income and the effective containment of operating expenditure, the cost-to-income ratio dropped to a record low of 35.7%.
The Bank set aside Baht 3.2 billion of loan loss provisions in the current quarter, 27% more than the provisions in the first quarter of last year. The ratio of NPL-to-loans stood at 2.11% at the end of March 2014, up from 2.06% at the end of March 2013 and has remained relatively stable since the end of 2013.
Commenting on the results, the Bank president, Khun Kannikar Chalitaporn stated that “while the reported record financial results would be good at any time, they are particularly creditable in the current economic environment. This achievement is made possible not only due to effectiveness of our business strategies but also because of our unrelenting drive to deliver the highest level of customer service in Thailand through motivating and engaging with all our staff as well as the communities in which we operate.”