Siam Commercial Bank and its subsidiaries announced a third-quarter net profit of Baht 14.8 billion which was 40.8% higher than the same period last year. This was a result of net profit of Baht 10.5 billion from normal operations and a one-time capital gain from the sale of SCB Life of Baht 11.6 billion.
In this quarter, the Bank has set aside additional provisions of Baht 9.1 billion on top of its normalized quarterly requirement of Baht 6.2 billion. For the first nine months of 2019, net profit stood at Baht 34.9 billion, up 5.9% yoy.
Despite moderate loan growth of 2.2% yoy due to the slower economy, net interest income (NII) increased 7.4% yoy to Baht 26.2 billion in the third quarter. The Bank’s proactive risk management and strategy to rebalance its loan portfolio towards higher margin products was the main reason for this NII growth.
Non-NII in the third quarter, excluding the one-time gain, was stable yoy because of resilient recurring fee income especially from lending-related activities and wealth products.
The Bank’s total operating income, including the one-time gain, rose significantly by 74.1% to Baht 60.5 billion which far exceeded expense growth. Consequently, the Bank’s cost-to-income ratio declined to 29.1% in the third quarter.
Non-performing loan (NPL) ratio rose to 3.01% at the end of September 2019 from 2.77% at the end of June 2019, reflecting the current state of the economy and prevailing economic headwinds. NPL coverage ratio stood at 144% in the current quarter while the Bank’s capital adequacy ratio remained strong at a record high of 18.0%.
Arthid Nanthawithaya, Chairman of the Executive Committee and CEO, said “In this quarter, the Bank recorded a gain from the sale of SCB Life. In light of domestic economic uncertainty and global economic volatility, we foresee the need to strengthen ourselves.
Thus, the Bank set aside additional provisions against potential problem loans. At the same time, we also continue to pursue long-term growth opportunities particularly from wealth management and life insurance businesses where we will start the partnership with FWD Group in the fourth quarter of this year. We will also explore new investment opportunities for long-term future growth of the Bank.”