High provisions contribute to SCB profit slump; Thanachart net up
Amid a sluggish economy, Siam Commercial Bank reported unaudited consolidated net profit of Bt47.2 billion for 2015
These included full provisions according to the Bank of Thailand’s requirements for Sahaviriya Steel Industries and the write-down of the loan to its subsidiary SSI-UK. Loans to both SSI and SSI-UK were classified as non-performing in the third quarter of 2015. However, both interest and non-interest income of the bank continued to grow. Further, SCB maintained effective operating-cost controls, resulting in a better cost-to-income ratio than in 2014 despite new capital outlays.
For the fourth quarter of 2015, SCB reported unreviewed consolidated net profit of Bt11.8 billion, a 3.6-per-cent decrease compared with the same quarter of the previous year, mainly from substantially higher provisions.
In 2015, SCB posted loan growth of 3.2 per cent, while net interest income increased by 2.1 per cent year on year thanks to lower cost of deposits.
Non-interest income increased by 16 per cent year on year on the large investment gains from the sales of equities recorded in the third quarter to mitigate the impact of the substantial additional provisions. Also, fee income and trading and foreign-exchange income maintained a steady growth momentum. The rate of non-performing loans rose to 2.89 per cent at the end of December, up from 2.11 per cent at the end of December 2014. The sharp year-on-year increase in NPLs was mainly due to SSI, which was classified as an NPL in the third quarter of 2015, as well as the increase in NPLs in the SME (small and medium-sized enterprise) and housing-loans segments amid a slowing economy. On the other hand, Thanachart Bank reported net-profit growth and lower NPLs.
In 2015, the bank earned net profit of Bt10.74 billion, up by 8.27 per cent year on year, and NPLs decreased to below 3 per cent, said Somjate Moosirilert, chief executive officer and president.
