Bangkok--18 Oct--The Siam Commercial Bank Public Company Limited
The Siam Commercial Bank PCL announces the preliminary results of operations for the first 9
months of 2006. Net profit was Baht 12,082 million. Operating profit (excluding investment gain, loan loss
provisions, loss from loans sold to TAMC and income tax) increased by 17.0% yoy to Baht 17,095 million from
Baht 14,610 million due to increases in interest and dividend income and non-interest income.
Net profit for 3Q06 was Baht 3,688 million, a decrease of Baht 483 million from Baht 4,171 million
due mainly to a one-time adjustment of selling price of loans sold to TAMC amounting to Baht 714 million as
the valuation of machinery collateral was revised down. Operating profit (excluding investment gain, loan
loss provisions, loss from loans sold to TAMC and income tax) increased 10.1% to Baht 6,133 million from
Baht 5,571 million in the previous quarter.
Khunying Jada Wattanasiritham, President & Chief Executive Officer said:
"3Q06 performance was satisfactory. Loans continued to expand in all segments. Loans expanded by
8.3% or Baht 50 billion from the end of 2005 and in line with target. Net interest margin was satisfactory
at 3.46% resulting in an increase in net interest and dividend income by 8.7% yoy. In this quarter, NPLs
declined by Baht 1,354 million from last quarter to Baht 58,425 million or 8.9% on debt restructuring and
write-offs."
Dr. Vichit Suraphongchai, Chairman of the Executive Committee added that:
"Operating performance of the Bank was in line with the Bank's policy. Emphasis continued
to be placed on assets growth and quality. Going forward, business expansion from the co-ordinated thrust of
companies under SCB Group will continue to materialize".
Significant items of operating results for the third quarter of 2006:
Management Discussion and Analysis
For the third quarter ended September 30, 2006
Net profit before review by independent auditors for the third quarter of 2006 was Baht 3,688
million, a decrease of Baht 483 million or 11.6% qoq from Baht 4,171 million due to loss from adjusting
selling price of loans sold to TAMC and increases in income tax and allowance for doubtful accounts. 3Q06
net profit also declined from Baht 5,272 million (30.1% yoy) a year earlier as the Bank started paying
taxes this year.
Operating profit (excluding investment gain, allowance for doubtful accounts, loss from loans sold
to TAMC and income tax) was Baht 6,133 million, an increase of Baht 563 million or 10.1% qoq and an increase
of Baht 1,032 million or 20.2% yoy.
Unit: Million Baht
3Q06 2Q06 % qoq 3Q05 % yoy
Net Profit 3,688 4,171 -11.6% 5,272 -30.1%
Income Tax 1,440 1,007 43.0% - -
Allowance for doubtful accounts 450 300 50.0% 300 50.0%
Investment gains 158 -93 NA 470 -66.3%
Loss from adjusting selling price of loans sold to TAMC 714 - NA - NA
Operating Profit 6,133 5,571 -10.1% 5,102 20.2%
1. Net interest and dividend income
Net interest and dividend income in this quarter (3Q06) was Baht 7,879 million, an increase of 8.7%
from last quarter (qoq) and an increase of 17.6% from the corresponding period of last year (yoy).
Unit: Million Baht
3Q06 2Q06 % qoq 3Q05 % yoy
Interest and Dividend Income 13,234 11,427 15.8% 8,298 59.5%
- Loans 10,197 9,258 10.2% 6,675 52.8%
- Interbank and money market 1,971 1,507 30.8% 472 317.2%
- Investments 1,066 662 61.1% 1,150 -7.4%
Interest Expenses 5,354 4,176 28.2% 1,596 235.5%
Net Interest and Dividend Income 7,879 7,250 8.7% 6,702 17.6%
Net Interest Margin* 3.46% 3.37% 3.49%
*Calculated by daily averaging of earning assets
Interest income on loans increased by Baht 940 million qoq to Baht 10,197 million due to loan
expansion and higher interest rates. Interest income from interbank and money market increased by Baht 464
million to Baht 1,971 million due to liquidity management. Interest and dividend income from investment
increased by Baht 404 million qoq to Baht 1,066 million, owing to Baht 374 million dividend income from
Vayupak Fund and higher dividend income from other investments.
Interest expenses were Baht 5,354 million, an increase of Baht 1,178 million or 28.2% qoq due to
increased fixed interest rate and higher deposit base. Interest expenses on long term borrowing increased
Baht 66 million due to the issuance of floating rate notes (FRN) totaling USD 300 million in the second
quarter.
Better interest and dividend income growth than that of interest expenses raised net interest
margin (NIM) to 3.46% from 3.37% in the last quarter. On a yoy basis, NIM slightly decreased from 3.49% in
3Q05. Net interest margin for the first nine months of this year was 3.49%.
2. Non-interest income
Non-interest income from operations (excluding investment gain) for this quarter was Baht 3,648
million, an increase of Baht 167 million or 4.8% qoq. Details are:
- Fee & service income decreased by Baht 220 million or 7.8% qoq to Baht 2,620 million, mostly on
lower loan fees.
- Gain on exchange decreased Baht 261 million as a result of lower transactions.
- Profit sharing from subsidiaries and associated companies was Baht 562 million, up from a loss
of Baht 138 million in the last quarter caused by provision booked by a subsidiary company (Siam Commercial
Leasing PCL).
- Other income decreased by Baht 52 million to Baht 143 million.
Unit: Million Baht
3Q06 2Q06 % qoq 3Q05 % yoy
Fee and service income 2,620 2,840 -7.8% 2,431 7.8%
- Acceptances, aval and guarantees 192 310 -38.0% 222 -13.2%
- Others 2,428 2,530 -4.1% 2,209 9.9%
Gain on exchange 322 584 -44.8% 593 -45.6%
Income from equity interest in 562 -138 NA 374 50.2%
subsidiaries/associated companies
Other income 143 195 -26.7% 86 67.0%
Total Operating Income 3,648 3,481 4.8% 3,483 4.7%
Gain/loss from investments 158 -93 NA 470 -66.3%
Total Non-Interest Income 3,806 3,387 12.4% 3,954 -3.7%
In this quarter, gain on investment was Baht 158 million compared with a loss on investment of Baht
93 million in the previous quarter, due mainly to gain on sales of debt instruments and certain investments.
In the previous quarter, the Bank set higher reserve for investment devaluation on the back of the market
situation.
Total non-interest income in this quarter was Baht 3,806 million, up by Baht 419 million qoq and
down by Baht 148 million or 3.7% yoy.
3. Non-interest expenses
Non-interest expenses from operations in this quarter increased by Baht 234 million or 4.5% qoq to
Baht 5,394 million from Baht 5,160 million. Key factors are:
- Personnel expenses increased by Baht 58 million or 3.4% qoq.
- Premise and equipment expenses increased by Baht 194 million or 16.3% due to the network
expansion and system development.
- Fee and service expenses increased by Baht 20 million.
- Directors' remuneration declined by Baht 42 million.
In this quarter the Bank booked Baht 714 million in loss from loans sold to TAMC as the TAMC
revised its valuation of machinery collateral was revised down to nil.
Unit: Million Baht
3Q06 2Q06 % qoq 3Q05 % yoy
Personnel expenses 1,757 1,699 3.4% 1,820 -3.4%
Premises and equipment expenses 1,388 1,193 16.3% 1,164 19.2%
Taxes and duties 444 440 0.9% 317 40.1%
Fee and service expenses 618 598 3.3% 563 9.7%
Directors' remuneration 12 54 -78.4% 11 2.2%
Contribution to the FIDF 626 626 0.0% 631 -0.7%
Other expenses 549 549 0.0% 577 -4.9%
Total Operating Expenses 5,394 5,160 4.5% 5,083 6.1%
Loss from adjusting selling price of loans sold to TAMC 714 - NA - NA
Total Non-Interest Expenses 6,108 5,160 18.4% 5,083 20.2%
Operating Cost to Income Ratio 46.8% 48.1% 49.9%
Compared to the same quarter of last year, operating expenses increased by Baht 311 million, as
premises and equipment expenses rose Baht 223 million, taxes and duties rose Baht 127 million and fee and
service expenses rose Baht 54 million while personnel expenses and other expenses decreased by Baht 62
million and 28 million respectively.
Operating cost to income ratio dropped to 46.8% in this quarter from 48.1% last quarter and from
49.9% a year earlier as income growth (both interest and non-interest income) outpaced that of expenses.
4. Loan loss provision
In this quarter, the Bank set aside Baht 450 million as general reserve. The increase in provision
was made in light of the economic cycle and in alignment with loan expansion.
Balance sheet as at September 30, 2006
1. Loans and Deposits
As at September 30, 2006, total loans outstanding before allowance for doubtful accounts were Baht
653,826 million, an increase of Baht 50,014 million or 8.3% from Baht 603,812 million at the end of 2005. In
the first 9 months of 2006, loans written off totaled Baht 4,830 million.
In comparison to end 2005, good loans expanded by Baht 56,674 million or 10.6% while loans under
Special Assets Group dropped by Baht 6,659 million or 9.9%.
Loan growth was broad-based. Notably, Business Banking loans (SME) increased by Baht 23,134
million or 20.8% while Corporate Banking loans grew Baht 17,000 million or 7.4% and retail loans increased
by Baht 16,540 million or 8.4% from end of 2005.
Unit: Million Baht
Sep 30, 06 Jun 30, 06 % qoq Dec 31, 05 % ytd
Good Bank 593,099 580,781 2.1% 536,425 10.6%
- Corporate Banking Group 245,553 249,134 -1.4% 228,553 7.4%
- Business Banking Group 134,617 123,532 9.0% 111,483 20.8%
- Retail Banking Group 212,929 208,114 2.3% 196,389 8.4%
Special Assets Group 60,728 63,061 -3.7% 67,387 -9.9%
Total Loans 653,826 643,842 1.6% 603,812 8.3%
At the end of September 2006, deposits stood at Baht 805,050 million, up Baht 182,619 million or
29.3% from Baht 622,431 million at end 2005 as fixed deposits were up 77.1%, demand deposits increased 16.8%
while savings deposits dropped 3.1%. Compared to the previous quarter, deposits increased by Baht 130,370
million or 19.3% on the Bank's deposits campaign during July - August.
Unit: Million Baht
Sep 30, 06 Jun 30, 06 % qoq Dec 31, 05 % ytd
Demand 34,390 24,561 40.0% 29,443 16.8%
Savings 337,645 328,375 2.8% 348,518 -3.1%
Fixed 433,015 321,743 34.6% 244,471 77.1%
- Less than 6 months 208,145 183,684 13.3% 165,708 25.6%
- 6 months and up to 1 year 102,202 31,929 220.1% 21,086 384.7%
- Over 1 year 122,668 106,130 15.6% 57,677 112.7%
Total Deposits 805,050 674,680 19.3% 622,431 29.3%
Gross Loans to Deposits Ratio 81.2% 95.4% 97.0%
Net Loans to Deposits Ratio 75.5% 88.4% 89.1%
As of September 30, 2006, loans to deposits ratio stood at 81.2%. Net loans (after loan loss
reserve) to deposits ratio decreased to 75.5% from 88.4% at end of June 2006 and 89.1% at end of 2005.
2. Investments
Investments totaled Baht 109,162 million, a decrease of 2.9% from end 2005. Short-term investment
decreased by Baht 2,087 million and long-term investment decreased by Baht 5,398 million. Investment in
subsidiaries and associated companies increased by Baht 4,281 million or 23.3% due mainly to the investment
in Siam Commercial Leasing PCL in this quarter.
Unit: Million Baht
Sep 30, 06 Jun 30, 06 % qoq Dec 31, 05 % ytd
- Short-term investment-net 18,458 12,243 50.8% 20,545 -10.2%
- Long-term investment-net 68,028 69,344 -1.9% 73,426 -7.4%
- Investment in subsidiaries and associated 22,676 22,571 0.5% 18,395 23.3%
companies-net
Total Investments-net 109,162 104,158 4.8% 112,366 -2.9%
3. Borrowings
Borrowings stood at Baht 36,101 million, an increase of Baht 8,407 million or 30.4% from end 2005
due to a decrease of Baht 4,357 million in short-term debentures, and an increase of Baht 12,764 million in
long-term borrowings from the issuance of floating rate notes (FRN) totaling USD 300 million in May.
4. Shareholders' equity
As at September 30, 2006, shareholders' equity stood at Baht 98,314 million, an increase of Baht
618 million from end 2005 attributed to net of profits for the nine-month period of Baht 12,082 million and
dividend payment of Baht 10,198 millionin accordance with shareholders meeting's resolution and revaluation
surplus on investment decrease of Baht 1,235 in line with the market situation.
Book value per share as of September 30, 2006 was Baht 28.92 (ordinary and preferred shares at end
of September 2006 totaled 3,399 million shares), up from Baht 27.82 as of June 30, 2006.
Total Capital Funds
Total capital funds (tier 1 and tier 2) as at September 30, 2006 were Baht 100,074 million or
approximately 15.2% of total risk assets, of which about 12.0% or Baht 78,916 million was tier 1 capital
(including the appropriation of Baht 5,036 million from 1H06 profit into capital funds).
Non-Performing Loans (NPLs)
As at September 30, 2006, non-performing loans (NPLs) were Baht 58,425 million or 8.9%, an
increase from Baht 57,122 million or 9.3% at the end of 2005 and decrease from 59,779 million or 9.2% of the
previous quarter.
Allowance for doubtful accounts as at September 30, 2006 stood at Baht 45,975 million, a decline of
Baht 3,700 million from Baht 49,675 million at end 2005 as a result of write-offs and NPLs sales. During
this year, Baht 1,050 million in loan loss reserves were booked. Loan loss coverage ratio was 78.7% at end
of September 2006, a decline from 87.0% at the end of last year.
Unit: Million Baht
Sep 30, 06 Dec 31, 05
Amount Allowance for Amount Allowance for
classified loans classified loans
Classified loans and Allowance for Doubtful Accounts (including financial institution)
Normal 592,222 8,340 546,718 7,541
Special Mention 8,775 171 8,252 164
Substandard 6,732 606 6,092 337
Doubtful 10,712 3,267 7,187 1,386
Doubtful Loss 40,980 17,532 43,843 20,496
Total 659,421 29,916 612,092 29,924
General and Specific Allowance 16,059 19,751
Total Allowance 45,975 49,675
Non-performing Loans 58,425 57,122
(Substandard and lower)
% of Total Classified Loans 8.9% 9.3%
Remark: Non-performing Loans (NPLs) are loans classified as substandard and lower,
including loans to financial institution but excluding accrued interest
receivable and other assets
CONTACT:
The Siam Commercial Bank Public Company Limited
9 Rutchadapisek Road, Jatujak, Bangkok 10900 THAILAND
Investor Relations Division Tel. +66 2 544-4222
E-mail: [email protected]
Website: www.scb.co.th