Bangkok--22 Jul--Bangkok Bank
Bangkok Bank and its subsidiaries have reported a consolidated net profit of Baht 17.4 billion for the first half of 2015, a decrease of Baht 552 million or 3.1 percent from the same period last year. Net interest income fell by Baht 1.6 billion or 5.4 percent while non-interest income rose by Baht 4.2 billion or 23.3 percent. Operating expenses rose by Baht 1.6 billion or 7.8 percent.
In the first half of 2015, uncertainty in the global economy and low agricultural commodity prices continued to impede the recovery of Thailand's export sector. Despite the acceleration of government investment and an expansion in tourism, household consumption and private investment have recovered more slowly than expected. Businesses postponed new investment until clearer signs of an economic turnaround become evident. As a result, the Bank's lending at the end of June 2015 amounted to Baht 1,789.6 billion, increasing slightly from the end of 2014 by Baht 7.4 billion or 0.4 percent.
In terms of loan quality, at the end of June 2015 non-performing loans (NPLs) were Baht 55.1 billion. The ratio of non-performing loans to total loans rose from 2.2 percent in the previous quarter to 2.5 percent in the second quarter of 2015, resulting from the slow economic recovery. In response, the Bank has continued its focus on effective risk management, maintaining appropriate loan quality by staying close to its customers and providing them with advice and assistance. At the same time, the Bank has set aside a high level of loan loss reserves to provide a cushion against economic uncertainty. For the six months ending June 30, 2015, provisioning expenses were Baht 5.9 billion, representing a ratio of loan loss reserves to NPLs of 170.4 percent and a ratio of loan loss reserves to total loans of 5.2 percent.
The Bank also continued to ensure its liquidity was adequate to meet the needs of customers. At the end of June 2015, total deposits were Baht 2,128.1 billion, an increase of Baht 69.3 billion or 3.4 percent from the end of 2014. The loan-to-deposit ratio stood at 84.1 percent, a decrease from 86.6 percent at the end of 2014.
Net interest income for the first half of 2015 amounted to Baht 27.5 billion. The net interest margin was 2.08 percent, a decrease from 2.37 percent in the second half of 2014, due partly to a lowering of the Bank's interest rates in line with the reduction in the policy interest rate and an increase in the deposit cost and volume which exceeded loan yield and volume.
Non-interest income for the first half of 2015 amounted to Baht 22.1 billion, an increase of Baht 4.2 billion or 23.3 percent from the first half of 2014. This was mainly due to an increase in gains on investments of Baht 2.5 billion and growth in net fees and service income of Baht 1.3 billion or 12.7 percent. This was due mainly to an increase in fee income from underwriting, mutual funds and securities business.
Operating expenses were Baht 22.0 billion, an increase of Baht 1.6 billion or 7.8 percent from the first half of 2014, due mainly to increases in personnel expenses and investments to improve operational efficiency. The cost-to-income ratio rose to 44.3 percent from 43.4 percent in the first half of 2014.
In terms of capital reserves, after the inclusion of net profit for the six months ending June 30, 2015, the total capital adequacy ratio, common equity Tier 1 ratio and Tier 1 capital ratio of the Bank and its subsidiaries would be approximately 18.5 percent, 16.4 percent and 16.4 percent, respectively.
Shareholders' equity as of June 30, 2015 amounted to Baht 349.8 billion, equivalent to 12.2 percent of total assets. The book value per share was Baht 183.27, an increase of Baht 13.80 from the end of 2014.