Bangkok--21 Jul--United Overseas Bank (Thai)
United Overseas Bank (Thai) Public Company Limited (UOB Thai), a subsidiary of the United Overseas Bank of Singapore, today announced a net profit of THB 919 million for the first half of 2006 (1H 2006).
The net profit of THB 919 million for 1H 2006 was an improvement of 44.3% from the THB 637 million recorded in 1H 2005 (the summarized statutory financial results are as attached in Annex 1). The improved result was due primarily to the inclusion of the UOB Radanasin Bank (UOBR) portfolio into UOB Thai following the completion of the merger between both banks on 28 November 2005.
On a pro-forma basis, UOB Thai’s THB 919 million net profit would have been a 11.5% improvement over the THB 824 million combined net profit of UOB Radanasin Bank and UOB Thai (then Bank of Asia) in 1H 2005 (the summarized pro-forma financial results are as attached in Annex 2). The improved results were a result of better operating results and partially offset by provisioning requirements.
On a pro-forma basis, the Bank’s 1H 2006 pre-provisions operating profit of THB 1,552 million was a 9.0% increase compared to the THB 1,424 million recorded in 1H 2005. Net interest and dividend income grew by 1.1% to THB 3,241 million while non-interest income declined by 11.7% to THB 1,357 million due mainly to lower gains in sale of investments. Total operating expenses declined by THB 9.0% to THB 3,046 million chiefly from integration expenses incurred in 2005 that were not repeated in 2006. The Bank set aside THB 627 million in provisions for doubtful debts in 1H 2006 primarily for normal business flows, compared to THB 583 million in 1H 2005.
As at 30 June 2006, the Bank’s total loan was THB 159.9 billion, a marginal 0.2% increase from end-2005. This marginal loan growth was a reflection of the cautious market and prevailing weak business sentiments. Given the prevailing weaker business outlook, the Bank conservatively downgraded some accounts on a qualitative basis to Non-Performing Loan (NPL) status despite these accounts continuing to be performing. As a consequence, the NPL to total loan ratio increased to 13.5% from the 10.5% reported as at end-2005. The qualitative downgrades had no impact to the Bank’s provision for doubtful debts, as the Bank already had set aside the required provisions for these accounts previously. Total deposits declined by 2.8% from end-2005 to THB 148.2 billion as at 30 June 2006. (refer to Annex 3 for Key balance sheet items)
The Bank’s Capital Adequacy Ratio remained strong at 17.75%.