Highlights for the first half of 2008:

• Net profit increased to Baht 10.6 billion
• Loan growth at 12.2 percent year-to-date
• Net interest margin stable at 3.34 percent

Bangkok Bank reported preliminary results for the first half of 2008, with a net profit of Baht 10.6 billion, up by Baht 659 million or 6.6 percent, compared with the same period last year.

Operating results in the first six months of the year reflected good loan growth, with increasing net interest income as well as higher fee income and foreign currency gains which outstripped the increase in the cost base.

The bank reported strong loan growth for the first half of 2008, growing by 12.2 percent or Baht 126.3 billion to Baht 1,161.7 billion at the end of June 2008. The increase was mainly due to increased working capital requirements from large and mid-size companies and from customers of the international branches. Nevertheless, the economic outlook in the second half of the year remains highly uncertain, with the rapid increase in inflation and slowing global economic growth as major concerns. As a result, loan growth is expected to ease in the second half.

Deposits at the end of June remained stable at Baht 1,268.0 billion when compared with December 2007. Non-performing loans at the end of June have increased slightly from the end of 2007 to Baht 82.9 billion or 7.0 percent of total loans.

Net interest income in the first 6 months of the year increased by Baht 3.0 billion to Baht 25.9 billion on the back of strong loan growth and improved funding costs. As a result, the net interest margin for the first half of 2008 improved to 3.34 percent from 3.15 percent in the previous year.

Fees and service income increased by 17.5 percent from the same period last year to Baht 8.7 billion, with good growth in basic banking services such as ATMs, electronic banking, credit cards and funds transfers, as well as in non-traditional products such as mutual funds and bancassurance. Revenue from the sale of bancassurance products so far this year has more than doubled from the same period last year, in part to do with the tax incentives announced earlier this year.

Foreign currency gains in the first 6 months of 2008 showed an impressive 27.8 percent increase to Baht 2.2 billion. Interest in foreclosed properties also picked up and the bank recorded a gain of 668 million from the sale of these properties, an increase of 26.3 percent from the previous year. The investment portfolio reported a loss of Baht 267 million, primarily due to impairment expenses in the first quarter related to the investments in equity from debt restructuring and in CDO.

Non-interest expenses in the first half of 2008 increased by 9.6 percent year-on-year to Baht 18.5 billion, with higher personnel expenses and premise and equipment expenses. Compared to the same period last year, the personnel expenses included the annual salary increase together with a special salary increase of Baht 2,000 per person to help ease the higher cost of living. In addition, staff numbers was also increased by 1,177 persons or 6.0 percent. This resulted in personnel expenses increasing by 17.3 percent from the same period last year to Baht 6.6 billion.

The increase in premise and equipment expenses by 14.7 percent to Baht 3.4 billion reflected the increase in both the branch network and the electronic banking network, with branches increasing by 89 branches and ATM machines increasing by 1,275 machines from June 2007. Therefore, at the end of June 2008, the bank had a total of 862 branches and 5,113 ATM machines.

In line with the growth of the loan portfolio, provisioning expenses in the first half amounted to Baht 3.0 billion, an increase of Baht 266 million from the same period in 2007. Meanwhile, corporate income tax increased by Baht 492 million or 10.2 percent to Baht 5.3 billion or amounted to approximately 33.2 percent of pre-tax profit.

Including the net profit for the period, the total capital adequacy ratio and the Tier 1 capital ratio remained strong at approximately 14.7 percent and 12.1 percent, respectively.

Shareholders’ equity at the end of June amounted to Baht 166.2 billion or 10.25 percent of total assets. Earnings per share for the half-year 2008 increased from Baht 5.23 per share in 2007 to Baht 5.58 per share.