Bangkok--20 Oct--Bangkok Bank
Bangkok Bank and its subsidiaries have reported a consolidated net profit of Baht 9.6 billion for the third quarter of 2014, an increase of Baht 546 million or 6.0 percent from the second quarter of 2014. Net interest income rose by Baht 147 million while non-interest income grew by Baht 1.7 billion. Operating expenses decreased by Baht 305 million.
The easing in Thailand’s political situation around the end of the second quarter has had a positive impact on the economy with both business and consumer confidence improving. However, the recovery in the export sector has been less than expected and some businesses are still waiting for clearer economic signs to emerge. While government investment is still at an early stage, it is expected to have a positive impact from the middle of next year.
Total lending at the end of September 2014 was Baht 1,741.4 billion, an increase of Baht 56.0 billion or 3.3 percent from the end of September 2013, but a decrease of Baht 11.2 billion or 0.6 percent from the end of 2013, due to loan repayments from large corporate customers. However, there is still ongoing demand for SME and mortgage loans as well as for loans made through the Bank’s international network.
In terms of loan quality, at the end of September 2014, non-performing loans (NPLs) were Baht 46.1 billion, an increase of Baht 2.9 billion from the end of 2013, while the ratio of non-performing loans to total loans was 2.3 percent compared to 2.2 percent at the end of 2013.
The increase in NPLs was mainly due to changing economic conditions and stronger competition which impacted medium to large-sized customers. The Bank is closely monitoring the situation, providing advice and assistance to customers in order to maintain the quality of its loans at an appropriate level.
The Bank set aside provisioning expenses of Baht 3.3 billion in the third quarter, taking total provisioning expenses for the first nine months of 2014 to Baht 7.7 billion, representing a ratio of loan loss reserves to NPLs of 198.2 percent and a ratio of loan loss reserves to total loans of 5.2 percent.
At the end of September 2014, total deposits were Baht 1,919.4 billion, a reduction of Baht 15.9 billion or 0.8 percent from the end of 2013, due to a portion of maturing fixed deposits being converted to investments in mutual funds or being used for loan repayments. The loan- to-deposit ratio was 90.7 percent, a decrease from 92.7 percent at the end of June 2014.
In the third quarter of 2014, the Bank’s net interest income was Baht 15.1 billion, an increase of 1.0 percent from the second quarter of 2014, while the net interest margin was unchanged at 2.44 percent as the Bank effectively managed its cost of deposits.
Non-interest income for the third quarter of 2014 was Baht 10.9 billion, an increase of Baht 1.7 billion or 17.8 percent from the second quarter of 2014, mainly due to gains on investment of Baht 2.5 billion in the third quarter. Net fees and service income was Baht 5.5 billion, an increase of Baht 203 million or 3.8 percent from the second quarter of 2014, due predominantly to increase in fees from a securities business, loans and mutual funds.
The Bank’s operating expenses were Baht 10.7 billion, a decrease of Baht 305 million or 2.8 percent from the second quarter of 2014, due to cost control even though the Bank continues to expand its branch network and invest in electronic services, including system development. The cost- to-income ratio decreased from 45.2 percent in the second quarter of 2014 to 40.9 percent in the third quarter of 2014.
In terms of capital, after the inclusion of net profit for the third quarter of 2014, the Bank’s total capital adequacy ratio, the common equity Tier 1 ratio and the Tier 1 capital ratio would be approximately 18.7 percent, 16.4 percent and 16.4 percent, respectively.
Shareholders’ equity as of September 30, 2014 amounted to Baht 318.8 billion, equivalent to 12.3 percent of total assets. The book value per share was Baht 167.03, an increase of Baht 12.00 from the end of 2013.