• January 19, 2016
• views
• Print

SCB announces 2015 net profit of Baht 47.2 Billion

Bangkok -- Amid a sluggish Thai economy, Siam Commercial Bank PCL reported (unaudited) consolidated net profit of Baht 47.2 billion for 2015 – an 11.5% decrease year-on-year. This year-on-year drop in net profit was attributed to the substantially higher provision expense set aside as a cushion against asset quality deterioration, including full provisions according to the Bank of Thailand’s requirements  for Sahaviriya Steel Industries Pcl. (SSI) and the write-down of the loan to its subsidiary (SSI-UK), both of which were classified as NPLs in the third quarter of 2015. However, both interest and non-interest income of the Bank continued to grow. Further, the Bank maintained its effective operating cost control, resulting in a better cost-to-income ratio compared to the previous year despite new capital outlays.

For the fourth quarter of 2015, the Bank reported (unreviewed) consolidated net profit of Baht 11.8 billion for 2015 – a 3.6% decrease compared to the same quarter of the previous year, mainly from substantially higher provisions year-on-year.

Commenting on the results, Arthid Nanthawithaya, Deputy Chairman of the Executive Committee and CEO of the Bank, noted that “2015 has been a tough year for the sector and SCB. Many unfavorable incidents and a slower-than-expected economic recovery negatively affected the Bank’s performance. Amid the economic downturn globally and domestically last year, the Bank heavily focused on closely assisting the Bank’s customers as well as enhancing risk management in all aspects.”

Net interest income increased by 2.1%, year-on-year, in 2015. This increase came from lower cost-of-deposits, consistent with the Bank’s strategy to reduce its cost of funding as well as from moderate loan growth. This increase was despite the negative impact of the two interest rate cuts in the first half of the year.

Non-interest income increased by 16%, year-on-year, in 2015, mainly due to 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 FX income maintained a steady growth momentum.

The ratio of NPL-to-loans rose to 2.89% at the end of December 2015, from 2.11% at the end of December 2014 but was lower than the 3.02% recorded in the last quarter.  The sharp year-on-year increase in NPLs was mainly from SSI which was classified as an NPL in the third quarter of 2015 as well as the increase in NPL in the SME and housing loans segments amid a slowing economy. At the same time, credit costs increased by Baht 16.5 billion to Baht 29.7 billion in 2015; the main reason for the drop in net profits for the year. The loan reserve coverage level stood below 2014 at 109.8%, compared to 138.1% at the end of 2014, but was higher than the 100.8% recorded at the end of the last quarter.

The Bank’s President, Yol Phokasub, adds that “Negative factors including the slowdown of the domestic economy caused the lower-than-expected financial performance this year. Our management and employees remain determined to drive the organization towards stronger competitive performance in the quarters ahead. With the major new initiatives that have been announced, along with collaborative efforts of all SCB Group employees, we expect to achieve our target return and remain on track to be ‘the bank of choice’ for its customers, shareholders, employees and the community.”

Re-disseminated by The Asian Banker