Bangkok--21 Jul--Siam Commercial Bank
Siam Commercial Bank and its subsidiaries have announced net profit for 2Q16 (based on unreviewed consolidated financial statements) of Baht 12,818 million, a decrease of 3.0% compared to the same period last year. This is a result of a special increase in loan loss provisions as the Bank had special profits following the reversal of the policy reserves of SCB Life. Therefore, the Bank decided to increase the allowance for doubtful accounts to strengthen the coverage ratio to 130.0%. Operating profit increased to Baht 24,391 million from Baht 21,494 million due to higher net interest income and net insurance premiums. For the first half of 2016, net profit stood at Baht 23,364 million, an 11.4% decrease from the first half of 2015.
Commenting on these results, the Bank's President and CEO, Khun Arthid Nanthawithaya noted that, "The Bank was able to maintain its performance at a satisfactory level despite economic circumstances in the second quarter being unfavorable to the business sector and undoubtedly affecting our customers. The Bank therefore provided as much assistance as possible to customers and offered financial services in line with the business environment to ensure that our customers can still operate and adjust to opportunities once the economy returns to normal."
Net interest income in the second quarter rose to Baht 21,761 million, an increase of 4.5% over the same period last year. The increase in net interest income was mainly the result of the Bank's strategy to proactively manage its cost of deposits by increasing the proportion of Current & Savings Accounts (CASA) and loan growth of 2.5% over the past year.
Non-interest income increased 22.1% over the second quarter of last year, mainly due to the reversal of policy reserves at SCB Life which resulted in higher net insurance premiums. Gains on investment also increased.
The Non-performing loan ratio this quarter stood at 2.77%, a decrease from 2.89% at the end of 2015 but an increase from 2.64% last quarter given a lackluster economic recovery. In this quarter, the Bank set aside loan loss provisions of Baht 8,512 million, or 1.84% of total loans, a 65.9% increase from 2Q15 in order to increase the coverage ratio to stand at 130% at the end of 2Q16 from 109.8% at the end of 2015 and 122.8% at the end of 1Q16.