Bangkok: Siam Commercial Bank PCL reported (unaudited) consolidated net profit of Baht 13,218 million for the second quarter of 2015 - up 0.5% on the first quarter but down 10.2% compared to the second quarter of 2014. For the first half of 2015, net profit stood at Baht 26,369 million, a 5.3% decrease from the first half of 2014.

The year-on-year decrease in quarterly net profit was partly from a large one-time gain on the disposal of the Bank's shares in its then non-life subsidiary in the second quarter of 2014 and partly the result of substantially higher additional loan loss provisions in the current quarter. These two reductions were partially offset by higher net fee income, higher interest income and higher net trading and FX income in the current quarter.

Commenting on the financial results Arthid Nanthawithaya, CEO and Deputy Chairman of the Executive Committee of the Bank said that "the economic landscape in Thailand during the second quarter continued to be very challenging for some segments of our customers, due to both internal and external factors that held back GDP growth. Hence, the Bank has set aside substantial additional loan loss provisions to address the potential deterioration in loan quality. Nevertheless, despite the lacklustre economic conditions, the Bank continues to announce solid financial results and this is a testament to the strength of our existing franchise."

Net interest income in the second quarter rose to Baht 20,814 million, an increase of 1.9% over the same period last year. The increase in net interest income was mainly the result of loan growth of 4.8% over the past year, the increased return from the investment portfolio and the lower cost of deposits.

Non-interest income decreased 5.5% over the second quarter of last year to stand at Baht 12,447 million. This drop was mainly due to the large one-time investment gain recorded last year on the sale of the Bank's shares in its then non-life subsidiary. This was partly offset by higher net fee income and higher net trading and FX income. Excluding this large gain on investment, non-interest income in the current quarter would have increased by 9.5% over the same period last year.

Given the slower-than-expected economic recovery in Thailand, the Bank has set aside Baht 5,131 million of impairment and loan loss provisions for the current quarter, up from Baht 3,601 million in the prior quarter and Baht 3,220 million in the second quarter of last year. This additional provisioning will provide a cushion against further asset quality deterioration in the current weak economic climate. The ratio of NPL-to-loans stood at 2.22% at the end of June 2015, up from 2.11% at the end of June 2014.

The Bank's President, Yol Phokasub, adds that "the results continue to reflect the tremendous engagement of the employees of our group to survive and thrive in what by all accounts was a difficult quarter. It is this spirit, above all else, that ensures that the Bank is both differentiated in the market place and continues to meet the expectation of all stakeholders."


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