Bangkok--18 Apr--TMB
TMB aims to expand customer base with Get MORE with TMB strategy, which has resulted in continuous growth in deposit. The Bank remains prudent on loan side. Asset quality is well-managed as target. The net profit for the first quarter of 2019 recoded at THB1,579 million
TMB Bank Public Company Limited today announced its financial results for the first quarter of 2019. The Bank expanded its deposit base further by 1.8% from the previous quarter (QoQ) to THB661 billion, driven by retail segment. Meanwhile, loan grew by 0.2% QoQ to THB687 billion, backed by mortgage. Net profit was reported at THB1,579 million or decreased by 7.2% QoQ, due mainly to lower non-interest income (Non-NII) coupled with the one-time set-up of employee retirement benefit following the latest revision of the Thai Labor Protection Act. Asset quality is on-track. Of which, NPL ratio stayed at 2.81%, while coverage ratio remained at a high level of 145%.
Mr. Piti Tantakasem, CEO of TMB, said "TMB has focused on deposit-led strategy by expanding its customer base through flagship deposit products. Once learned and understood our customers, we then offer them other products and services including loans, bancassurance, and investment that fit and answer their financial needs. At TMB, we do not only Make THE Difference on products and services but would also like to offer more benefits to the customers under Get MORE with TMB strategy i.e. TMB recently offers more benefits in the form of accident insurance with coverage up to 20 times of deposit or maximum of THB3 million to TMB All Free customers who has maintained balance of THB5,000 at minimum. With genuine and continuing to offer products and benefits, TMB can expand its customer base and deposit continuously."
Consequently, TMB has generated deposit base growth of 1.8% for the first three months of 2019, which supported by retails segment through flagship products – TMB All Free (+2%), TMB No Fixed (+3%) and including digital saving product, ME Save (+7%).
In term of lending, the Bank focused on growing new loan and managing the asset quality of existing portfolio with prudence. New loan expansion was backed by a continuous growth from retail mortgage portfolio (+6%). Whereas, corporate loan decreased, mainly from large corporates' repayment and a portfolio improvement especially in medium SME segment. As a result, the Bank saw a decline in large corporate and medium SME. Total loan therefore grew at 0.2% QoQ.
On the revenue side, TMB registered Net Interest Income (NII) for the first quarter of 2019 of THB6,236 million, flat QoQ. The Bank started to see the recovery of its Net Interest Margin (NIM) which slightly improved to 2.89% from 2.86% in the previous quarter. At the same time, Non-Interest Income (Non-NII) dropped by 12.9% QoQ to THB2,280 million, mainly due to lower net fee income in comparable to the fourth quarter of the previous year.
As a result, total operating revenue was posted at THB8,517 million, declined by 3.8% QoQ. The Operating expenses rose by 0.5% QoQ to THB4,738 million, primarily due to the one-time set-up of employee retirement benefit following the latest revision of the Thai Labor Protection Act. As a result, the Bank registered Pre-Provision Operating Profit (PPOP) of THB3,790 million which decreased by 9.3% QoQ. After provision of THB1,839 million and tax, net profit was reported at THB1,579 million which dropped by 7.2% QoQ. Note that, if excluded the one-time expense, TMB would have generated net profit of THB1,862 million which rose 9.5% QoQ.
In terms of asset quality, the overall outlook was in line with 2019 target of which the Bank aims to keep its NPL ratio below 2.9% and NPL coverage ratio above 140%. In the first quarter of 2019, TMB reported NPL ratio of 2.81% and NPL coverage ratio which reflected a risk-absorption ability, stayed at high level of 145%.
Lastly, capital adequacy ratio (CAR) and Tier 1 ratio for the first quarter of 2019 stayed at 17.5% and 13.7%. The figures were in line with Basel III framework and higher than the Bank of Thailand's minimum requirement of CAR at 11.0% and Tier 1 at 8.5%.