Bangkok--19 Oct--Bangkok Bank Highlights in Q3 of 2007 Net profit rose by 17.9 percent year-on-year Net interest income rose by 8.9 percent year-on-year Fees and service income rose by 8.6 percent year-on-year Non-interest expenses dropped by 18.0 percent year-on-year Bangkok Bank reported an improvement in the third quarter preliminary results with a net profit of Baht 5.0 billion, representing an increase of Baht 766 million year-on-year or 17.9 percent while pre-tax, pre-provisioning profit amounted to Baht 8.7 billion, an increase of 43.7 percent. Year-to-date business volumes increased, both in terms of loans and deposits, while quality of assets was comparable to the end of 2006. Compared to the third quarter of last year, revenue increase was driven by higher net interest income, fee income and foreign exchange profits while expenses declined significantly, resulting in improved profits. Net interest income in the quarter rose by Baht 1.0 billion, or 8.9 percent year-on-year, to Baht 11.9 billion. While interest income declined across all categories reflecting the lower market interest rate levels, the relatively greater reduction in interest expenses helped to offset the lower income. As a result, the net interest margin in the third quarter rose to 3.13 percent, from 2.97 percent in the same period last year. Fees and service income increased by 8.6 percent year-on-year to Baht 4.1 billion, largely due to the growth of fee revenues from ATM and electronic banking, and credit card services. Profit from foreign exchange amounted to Baht 1.1 billion, an increase of 15.3 percent. However, non-interest income as a whole declined by 4.0 percent to Baht 5.4billion. This is because the mark-to-market valuations of the US$50 million investment in CDO's was affected by the dislocations of interest rates in the US market as a result of the subprime mortgage crisis, although the investment of the bank is not directly exposed to the subprime market. The bank took a charge of Baht 383 million to reflect this development. Non-interest expenses in the third quarter amounted to Baht 8.6 billion, a decrease of Baht 1.9 billion, or 18.0 percent from the third quarter of 2006 when the bank booked a one-time charge of baht 2.8 billion related to the assets transferred to the TAMC. Personnel costs increased by 9.0 percent reflecting market trends while premises expenses increased by 12.0 percent with the expansion of the branch network. At the end of September 2007, the bank had total loans of Baht 995.4 billion, an increase of 3.9 percent from the end of 2006. The increase in lending was across all customer ธนาคารกรุงเทพ จำกัด (มหาชน) (บมจ.111) 333 ถนนสีลม กรุงเทพฯ 10500 โทรศัพท์ (662) 230-2710 โทรสาร (662) 231-4692 Bangkok Bank Public Company Limited (Bor. Mor. Jor.111) 333 Silom Road Bangkok 10500 Thailand Tel. (662) 230-2710 Fax. (662) 231-4692 segments, both individual and business. Increases in loans to business entities were primarily for working capital financing while consumer loans were predominantly home loans. Deposits rose by 4.2 percent to Baht 1,273.0 billion. Non-performing loans (NPLs) as at the end of September 2007 amounted to Baht 88.8 billion, representing 8.7 percent of the total outstanding loans, compared to 9.1 percent at the end of June 2007. Provisioning expenses in the third quarter amounted to Baht 1.2 billion, and loan loss reserves at the end of the quarter was Baht 70.7 billion, well over the minimum level as required by the Bank of Thailand of Baht 55.9 billion. Shareholders' equity, as of September 30, 2007, stood at Baht 160.9 billion. With the inclusion of the profit for the third quarter of 2007, the bank's total capital adequacy ratio and Tier 1 capital ratio to risk assets remained healthy at approximately 15.6 percent and 12.9 percent, respectively. Earnings per share in the third quarter were Baht 2.64.