SCB ANNOUNCED FIRST-QUARTER PROFIT OF BAHT 10.1 BILLION
Bangkok: Siam Commercial Bank and its subsidiaries reported consolidated net profit (based on unreviewed financial statements) of Baht 10.1 billion for the first quarter of 2021. Net profit grew 9.0% yoy and 103.2% qoq while pre-provision operating profit increased 6.6% yoy to Baht 22.7 billion mainly due to the strength of non-interest income businesses and the Bank’s commitment to disciplined cost management.
Net interest income declined 9.3% yoy to Baht 23.4 billion because of yield compression in the current low interest rate environment despite 8.7% yoy loan growth and lower funding costs.
Non-interest income increased 21.2% yoy to Baht 14.4 billion. Growth in non-interest income was driven by strong revenue from the bancassurance and wealth management businesses as well as mark-to-market gains on the Bank’s and its subsidiary’s investment portfolios.
Expenses declined 7.9% yoy to Baht 15.1 billion due to the Bank’s effective cost control and lower cost-to-serve from digital channel migration. As a result, cost-to-income ratio improved significantly this quarter to 40% from 44% in the previous year.
The Bank set aside Baht 10.0 billion of provisions in the first quarter which were lower than the peak level last year but still remained elevated given the economic uncertainty during the COVID-19 pandemic.
Non-performing loan ratio increased to 3.79% at the end of March 2021 from 3.68% at the end of December 2020. The increase in NPLs reflected the Bank’s conservative approach to NPL management through proactive qualitative loan downgrade and long-term value preservation workout strategy. Nonetheless, NPL coverage remained high at 139.6% in conjunction with a strong capital adequacy ratio at 18.2%.
Arthid Nanthawithaya, Chairman of the Executive Committee and CEO, stated:
Net interest income declined 9.3% yoy to Baht 23.4 billion because of yield compression in the current low interest rate environment despite 8.7% yoy loan growth and lower funding costs.
Non-interest income increased 21.2% yoy to Baht 14.4 billion. Growth in non-interest income was driven by strong revenue from the bancassurance and wealth management businesses as well as mark-to-market gains on the Bank’s and its subsidiary’s investment portfolios.
Expenses declined 7.9% yoy to Baht 15.1 billion due to the Bank’s effective cost control and lower cost-to-serve from digital channel migration. As a result, cost-to-income ratio improved significantly this quarter to 40% from 44% in the previous year.
The Bank set aside Baht 10.0 billion of provisions in the first quarter which were lower than the peak level last year but still remained elevated given the economic uncertainty during the COVID-19 pandemic.
Non-performing loan ratio increased to 3.79% at the end of March 2021 from 3.68% at the end of December 2020. The increase in NPLs reflected the Bank’s conservative approach to NPL management through proactive qualitative loan downgrade and long-term value preservation workout strategy. Nonetheless, NPL coverage remained high at 139.6% in conjunction with a strong capital adequacy ratio at 18.2%.
Arthid Nanthawithaya, Chairman of the Executive Committee and CEO, stated:
“The Bank’s strong operating performance in the first quarter shows the resilience of our core businesses and our competitive advantage derived from digital and technology capabilities. Effective cost discipline and prudent risk management also prove vital in helping us successfully navigate through this uncertain time while assisting affected customers with targeted relief programs. Despite the resurgence of COVID-19 cases in Thailand, the Bank’s balance sheet remains strong to support the affected customers and delayed economic recovery. Nevertheless, the current challenges make it even more important for the Bank to focus on enhancing organization agility, investing in new technology and infrastructure, and expanding our digital capabilities and ecosystems through strategic partnership.”
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