Bangkok--17 Jul--Bangkok Bank
Net interest income up 6.4% Non-interest income up 7.1%
Bangkok Bank and its subsidiaries have reported a consolidated net profit of Baht 9.0 billion for the second quarter of 2014, an increase of Baht 64 million from the first quarter of 2014. Net interest income rose by Baht 895 million while non-interest income grew by Baht 612 million. Operating expenses increased by Baht 1.5 billion.
The Bank’s performance came against the backdrop of a subdued economy over the first half of 2014. Political uncertainties lowered the confidence of businesses and households alike. Together with a slow recovery in exports and limits to government spending, this resulted in lower loan demand for both working capital and business expansion, as companies awaited signs of economic recovery and clarity on government policy.
Despite these factors, at the end of June 2014, the Bank’s total lending was Baht 1,764.5 billion, an increase of Baht 11.9 billion or 0.7 percent from the end of 2013. SME and mortgage loans, and loans made through the Bank’s international network, continued to rise in line with the Bank’s targets.
The economic slowdown impacted some customers, and as a result non-performing loans (NPLs) at the end of June 2014 amounted to Baht 45.0 billion, an increase of Baht 1.8 billion from the end of 2013, but at a similar level to the end of March 2014. This was equivalent to 2.3 percent of total lending, compared with 2.2 percent at both the end of last year and at the end of March 2014. The Bank closely monitored all customer segments and continued to provide advice and assistance to customers in order to maintain the quality of loans at an appropriate level.
Meanwhile the Bank maintained its provisioning policy, setting aside provisioning expenses of Baht 2.3 billion in the second quarter, resulting in a ratio of loan loss reserves to NPLs of 216.0 percent.
Total deposits at the end of June 2014 were Baht 1,903.4 billion, 1.6 percent lower from six months earlier, while lending increased by 0.7 percent over the same period. The loan-to-deposit ratio rose from 90.6 percent at the end of 2013 to 92.7 percent.
Net interest income for the second quarter of 2014 was Baht 15.0 billion and the net interest margin rose from 2.30 percent for the first quarter to 2.44 percent as the Bank judiciously managed its cost of deposits. The 7.1 percent increase in non-interest income was due mainly to dividend income and gains on properties for sale. The 16.5 percent increase in operating expenses was due mainly to investment costs related to branch and electronic services expansion, including system development. The cost-to-income ratio for the second quarter of 2014 stood at 45.2 percent.
In terms of capital funds, after the inclusion of net profit for the half year ending June 30, 2014, the Bank’s total capital adequacy ratio, the common equity Tier 1 ratio and the Tier 1 capital ratio would be approximately 18.1 percent, 15.7 percent and 15.7 percent, respectively.
Shareholders’ equity at the end of the second quarter was Baht 313.1 billion, equivalent to 12.2 percent of total assets. The book value per share was Baht 164.02, an increase of Baht 8.99 from the end of 2013.