Bangkok--20 Oct--SCB
SCB announced its unaudited third quarter 2009 results, reporting that net profit had increased to Baht 5.2 Billion for the quarter compared to the same period in 2008 — a 7.7% improvement. The main driver for the improved performance was its Non Interest Income which grew by 30.1% on the back of robust fee income growth and gains on investments. Also, the Bank’s ability to contain expenses, only recording a 1.4% year-on-year, contributed to the improved bottom line. Finally, the Bank reduced its NPL ratio to 4.7% compared to 5.2% at the end of third quarter of 2008.
Commenting on the results, Dr. Vichit Suraphongchai, Chairman of its Executive Committee, noted that “the results testify that we have been able to withstand the headwinds of the sharpest economic contractions since Asian economic crisis of the late 1990’s and emerge in remarkably solid shape. As we approach the tail end of this crisis, we have record high capital levels, solid net profit & return on equity, and the highest market capitalization of all financial institutions in the country. This competitive positioning was the result of years of efforts to transform the Bank and make it responsive and resilient to the ever-shifting contours of the new economic landscape”.
The main driver of the Bank’s solid performance was the robust growth of fee income, particularly for its flagship cards, bancassurance and fund management products of the Bank. Fee income for the third quarter was at Baht 4,850 million and grew 12.8% year-on-year as a result of the strong sales capability of the Bank’s retail franchise, notwithstanding the underlying economic climate. This was facilitated through optimized products that offered a compelling and timely value proposition to its large and growing customer base.
Mindful of the inherent uncertainties of the economic slump, the Bank was able to contain expense growth to very modest levels, despite the continued build-up of its retail franchise and investment in new capabilities that were necessary to lift its performance as economic growth returns in 2010. Non Interest Expenses for the third quarter were at Baht 8,583 million, only 1.4% above the level in the third quarter of 2008.
Finally, the Bank reported that, despite the sharp economic downturn, asset quality remained unscathed. NPLs stood at 4.7% at the end of September 2009, compared to 5.2% a year earlier and at about the same level as June 30, 2009. At the same time, the coverage ratio (total allowance to non-performing loans) stood at a slightly improved 84.5%.
Khun Kannikar Chalitaporn, President of the Bank, observed that “the results demonstrate the effectiveness with which the Bank has navigated the troubled waters of the past year. Also, these results reflect the speed and ease with which the Bank has been able to formulate effective strategies to stay ahead of the economic downturn. She added, “Equally, we are determined to be positioned to take early advantage of the economic recovery and have already established the platform to pursue the growth opportunities which will no doubt arise in the months ahead”.
Siam Commercial Bank PCL is a leading universal bank in Thailand. It was established by Royal Charter in 1906 as the first Thai Bank and, as at September 30, 2009, had the highest market capitalization among Thai Financial Institutions (Baht 289 billion). It has the largest branch (961), exchange booth (122), and ATM (6,798) 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 an asset size of Baht 1,299 Billion). Further information is available on the Bank's web site at www.scb.co.th.
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