Bangkok--21 Jul--Bangkok Bank
Net profit rises by 40.4 percent
Lending up by 2.6 percent
Non-performing loans declined by Baht 1,254 million
Gain on investments of Baht 2,449 million, mainly from ACL sale
Bangkok Bank has recorded a consolidated net profit of Baht 6.9 billion for the second quarter of 2010, Baht 2.0 billion, or 40.4 percent, higher than the same quarter a year ago and Baht 793 million, or 13.1 percent, higher than the previous quarter.
Net interest income also rose by 5.9 percent from the previous quarter and by 2.6 percent year-on-year, due to greater decline in interest expenses than decrease in interest income. Net interest margin improved from 2.9 percent for the previous quarter to 3.0 percent.
Bangkok Bank President Chartsiri Sophonpanich said the result was satisfactory, and the outlook is positive. The Thai economy is showing signs of improvements with the export sector continuing to be the main driver behind Thailand’s economic recovery.
“The bank is well positioned to benefit alongside its customers from the strengthening economy. Bangkok Bank has adopted a guideline for our people to work closely with customers. This close-relationship working approach allows us to gain a deeper understanding of our customers’ businesses and their needs. This approach has provided the bank with greater opportunities to strengthen its relationship with the target customers and to support them as appropriate.
“In the past quarter, the bank was able to achieve its goals in four main areas: loan expansion, fees and service income growth, high liquidity, and strong capital position.”
Lending rose 2.3 percent from the first quarter and 2.6 percent year-to-date. Deposits rose 1.1 percent from the previous quarter, and were stable year-to-date. The loan-to-deposit ratio increased from 85.5 percent at the end of the previous quarter to 86.5 percent.
Fee income rose 5.7 percent compared with the same quarter last year. Fees from loan-related services increased, along with loan portfolio expansion. The increase was also due to greater contributions from several products and services, including trade finance, credit cards, and bancassurance.
The bank recorded a gain on investments of Baht 2.4 billion in this quarter. The gain was mainly due to the sale of its 306.3 million shares in ACL Bank (ACL) to Industrial and Commercial Bank of China Limited (ICBC).
Non-interest expenses rose 14.9 percent from the same quarter last year. Major items included personnel expenses and premises and equipment expenses, which increased by 11.4 percent and 7.6 percent, respectively.
The value of non-performing loans (NPLs) at the end of June was Baht 55.1 billion, Baht 1.3 billion lower than the end of March 2010. The bank set aside provisioning expenses of Baht 1.9 billion this quarter.
The bank’s loan loss reserves continued to be strong at Baht 70.5 billion and the ratio of loan loss reserves to NPLs was healthy at 127.9 percent.
The bank maintained its strong capital position. With the inclusion of the net profit for the first-half period, its capital adequacy ratio was 17.0 percent and its Tier 1 capital ratio was 14.0 percent.
Shareholders’ equity as at June 30, 2010 was Baht 217.7 billion.