Bangkok--21 Jul--The Siam Commercial Bank Year-on-Year Profit after Tax Increased by 35% The Siam Commercial Bank, the first Thai Bank, announced consolidated net profits for its second quarter of Baht 5,818 million - a 35% year-on-year increase in its profits and the highest ever level achieved in the second quarter. These results mark the second consecutive quarter of record growth in net profit. This sustained increase in profitability was driven by continued robust contributions from its universal banking model— the core strategic thrust of the Bank over the past few years. In particular, the Bank announced solid improvement in its Non Interest Income, Net Interest Income, and the effective containment of operational costs. Commenting on the sustained profitability reflected in the results for the first two quarters of 2008, Dr. Vichit Suraphongchai, the chairman of the Bank’s executive committee, noted that “we are very satisfied with our performance so far, given the challenging macro-economic environment, both globally and in Thailand. The results mirror the successful execution of our transformational strategies and the effectiveness of the new universal banking business model that we have adopted.” He added that “we believe that our performance demonstrates the Bank’s solid positioning to meet the hard challenges that lie ahead for our industry.” The core driver in sustaining the profitability in the second quarter arises from the effective deployment of a universal banking model. This is manifested in: - The impressive growth in Non-Interest Income (23% year-on-year), particularly from fees related to its loans, retail products, as well as the income from Treasury services (25.4%, 12.2% and 64.8% growth respectively, year-on-year). - Concurrently, the Bank’s Net Interest Income recorded significant growth — 19% Year-on-Year — on the back of dramatic improvement in its Net Interest Margin (3.92% in this quarter vs. 3.63% in the same quarter last year). This improvement to the margins arises from both the effective price/risk management practices, and the proactive management of the cost of deposits (1.54% in the current quarter vs. 2.26% in the same quarter last year). In addition, the Net Interest Income benefited from the healthy 12% year-on-year loan growth. - At the same time, the Bank was able to drive operational efficiencies and reduce its non-interest expenses. These efficiencies are evident in the significant improvement in cost-to-income ratio (46.6% in the current quarter vs. 51.0% in the second quarter of 2007). The Bank has moved aggressively to reduce its legacy NPLs over the past few quarters. As a result, NPLs at the end of the current quarter stood at 5.3% compared to 8.0% at the end of Q2/07. Although the announced second quarter profits were lower than the first quarter of 2008, if adjustments are made to allow for one-time investment gains and the seasonal dividends recorded in the first quarter, the core net profit for the second quarter is better than that for the first quarter. This reflects the sustainability of the qualitative improvements that have been made on almost all fronts in the Bank. Commenting on these record quarterly results the Bank President Kannikar Chalitaporn, stated that “the continuous performance improvement we have achieved on almost all fronts, in a climate of huge uncertainties, is in large measure attributable to the quality of our franchise in terms of service levels, customer loyalty and staff commitment. While we expect that the current economic climate will continue to challenge us in the months ahead, we are competitively in the pole position to not just withstand the inevitable shocks that lie ahead but, in addition, to emerge as the best and strongest financial institution in the country as the economy inevitably recovers Consequently, we believe that a continued high premium for our shares is more than justified.” The Siam Commercial Bank pcl is the leading universal bank in Thailand. It was established by Royal Charter in 1906 as the first Thai Bank and, as at June 30, 2008, had the highest market capitalization among the Thai Financial Institutions (Baht 264 billion). It has the largest branch (913), exchange booth (146) and ATM (5,552) network in the country attesting to its dominant position in the retail financial services marketplace. It has a diverse range of Corporate, SME, Private and Retail customers nationwide and has the third highest asset size amongst the financial institutions in Thailand (Baht 1,206 Billion). Further information is available on its web site www.scb.co.th . For more information please contact: Corporate Communications Division Tel: 02-544-4502, 02-544-4517 Email: [email protected]