Bangkok--19 Jan--Siam Commercial Bank
By any standard, 2014 was a difficult year for Thailand in economic terms. Yet, Siam Commercial Bank PCL (“SCB”) was able to maintain its momentum and announce the 5th successive year of net profit growth. Unaudited consolidated net profit was reported at Baht 53,335 million, a 6.2% increase from 2013. The 2014 year-on-year growth in net profit was mainly attributable to the substantially higher net interest income primarily achieved through the significant reduction in interest expenses together with higher net fee income. This year-on-year increase was partly offset by lower dividend income (given that two exceptional dividends were recorded in 1Q13 and 3Q13) and lower net trading and FX income.
The Bank also reported its fourth quarter unaudited net profit at Baht 12,230 million, a 4.1% increase year-on-year. This too was driven by the lower interest expenses and higher fee income but lower provision expenses – as an additional prudential provision was booked in the fourth quarter of last year. This year-on-year increase in net profit was partially off-set by a large investment gain that was booked in 4Q13.
Dr. Vichit Suraphongchai, Chairman of the Bank’s Executive Committee, notes that “it is really only in difficult economic periods that a Bank’s operating model is put to the test. The fact that SCB was able to deliver record results over this challenging year is a testament to the agility of its operating platform, the soundness of its business strategies and the capability of its management and staff”.
Net interest income stood at Baht 81,100 million in 2014, an increase of 11.1% compared to 2013. This increase in interest income was the result of substantially lower interest expenses on deposits, despite the increase in the deposit volume, consistent with the Bank’s strategy to proactively reduce its cost of deposits relative to its peer group. To a lesser extent, the Bank benefitted from the modest loan growth.
Non-interest income decreased 6.9% year-on-year to Baht 47,030 million in 2014, which was the result of lower dividend income (as substantial exceptional dividends recorded in 1Q13 and 3Q13), lower net trading and FX income and lower net insurance premium.
Loan quality remained stable despite considerable downward pressure. The ratio of NPL-to-loans stood at 2.11% at the end of December 2014, down from 2.14% at the end of December 2013, although the volume of NPLs at Baht 42,743 million increased by 6.9% compared to the end of last year. The Bank set aside Baht 13,214 millionof loan loss provisions in 2014.
Kannikar Chalitaporn, the Bank’s president, reflecting on the results noted that “as previously announced, I will be stepping down as president in early April. I take this opportunity to thank the Board, the employees and all our customers for their support without whom five successive years of net profit growth would not have been possible. It has been a privilege for me to lead the first Thai Bank to this high performance level and I am confident that the new leadership team will take its performance even higher in the drive to attain the vision to being the Bank of Choice in Thailand for all our stakeholders”.