Banks post healthy 2013 earnings

The combined net profit of eight commercial banks surged 20.59% in 2013 thanks largely to higher interest and non-interest revenue, reflecting their resilience amid the sluggish economy and political turmoil.

The lower corporate income tax to 20% in 2013 from 23% in 2012 also gave a boost to the banks' bottom line.

The eight banks posted a total net profit of 156.78 billion baht last year, up from 130 billion in the previous year.

As of yesterday, Krungthai Bank, CIMB Thai Bank and Thanachart Capital had not submitted their yearly financial statements.

Seven of the eight listed banks saw their 2013 net profit surge, although they still set aside high provisions to counter economic uncertainties.

Siam Commercial Bank (SCB) was the best performer among its peers in terms of net profit amount.

The country's third-largest bank by assets last year recorded a net profit of 50.23 billion baht, up by 28% from 2012.

SCB reported solid earnings in 2013, although it put aside additional provisions of 13.6 billion in the year compared with 9.4 billion the previous year.

In terms of net profit growth, TMB Bank performed the best in 2013 with an almost 355% rise to 5.74 billion baht.

Its special provisions in 2013 were 7.61 billion baht against 5.29 billion in 2012.

Bangkok Bank (BBL), the country's biggest bank by assets, enjoyed a 12.7% increase in its 2013 net profit to 35.91 billion baht, it said in a filing with the Stock Exchange of Thailand (SET).

Its net interest revenue last year amounted to 13.87 billion baht, marginally up from 13.8 billion baht in the previous year.

BBL's net fee and service revenue also rose to 5.12 billion baht from 5 billion in 2012.

Its loans in 2013 expanded robustly at 12.7% from 2012 to 1.753 trillion baht.

The bank's net interest margin last year, however, narrowed to 2.36% from 2.55% due to higher deposits costs but lower returns from lending.

BBL set aside 8.6 billion in provisions last year.

Its non-performing loans totalled 43.2 billion baht, while its NPL ratio fell to 2.2% of loans outstanding as of Dec 31, it said without providing a comparative figure.

The bank's loan-loss reserve to NPLs was at 214% in 2013.

On the other end of the scale, the 2013 net profit of Bank of Ayudhya (BAY) fell by 4.15% from 2012 before to 14.02 billion baht.

An additional 2.55 billion baht was set aside as reserves last June to cushion against economic uncertainty, and this bit into its bottom line.

Excluding the special provisions, the country's fifth-largest lender by assets would have posted a net profit of 16.18 billion baht, up by 10.3% from 2012, BAY said in a statement.

As of Dec 31, its provisions were 37.03 billion baht, raising its loan coverage ratio to 142%.

Its net interest revenue last year rose by 12.5% from 2012 to 44.94 billion baht, while net fee and service revenue jumped 14.3% to 14.55 billion.

The bank's net interest margin was healthy at 4.37%.

In the fourth quarter alone, BAY's net profit dropped by 15.9% year-on-year to 3.16 billion baht, as it put aside 1.79 billion in loan-loss reserves.

BAY expects 9% lending growth this year compared with 13.6% last year. Its outstanding loans totalled 942.63 billion baht as of Dec 31.

The banking sector index on the SET edged down by 0.2% yesterday to 472.23 points in trade worth 6.61 billion baht.

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