- Third quarter net profit up 22.3%
- Net interest margin up to 2.88%
- Cost to income ratio down to 40.0%
Bangkok Bank continues to perform strongly in 2011, posting a consolidated net profit of Baht 7.6 billion for the year’s third quarter, Baht 1.4 billion or 22.3 percent higher than the same quarter a year ago. Net profit for the year’s first nine months, ending September 30, 2011, was Baht 21.4 billion, Baht 2.5 billion or 13.1 percent higher than the same period in 2010.
Bangkok Bank President Chartsiri Sophonpanich said: "Several key factors have contributed to the bank’s success in the third quarter. We have seen strong growth in exports and domestic consumption, higher commodity prices, and accelerated production from industries that had been impacted by second-quarter supply disruptions. These factors led to increased demand for working capital."
"At the same time, rising business confidence after July’s general election, the need for business to improve and expand in order to remain competitive, and greater investment activity locally and internationally, encouraged lending for capital expenditure," said Mr. Chartsiri.
"Bangkok Bank is the dominant player in lending to large corporates and SMEs, and was well- positioned to benefit from greater loan demand from both sectors. During the first nine months of this year, our lending grew by Baht 144.8 billion or 11.5 percent from December 31, 2010, and is 20.1 percent higher than at September 30, 2010. This growth was mainly from large corporate and medium and small businesses while consumer loans in the third quarter also improved compared with the first half of this year."
Risk management continues to be a priority of the bank, and as a result the bank has maintained good credit quality. Non-performing loans continue to decline, to Baht 42.0 billion or 2.8 percent of total loans at the end of September 2011, compared with 45.6 billion or 3.0 percent at the end of 2010.
Also, in order to prepare for uncertainties, consistent with our continued prudent management, the bank provided an additional Baht 5.0 billion of provisioning expenses in the first nine months of this year, improving its loan loss reserve coverage ratio from 158.9 percent at December 31, 2010 to 184.5 percent.
At the end of September 2011, the bank’s total deposits were Baht 1,533.9 billion, up 139.6 billion or 10.0 percent from the end of December 2010. This strong growth, despite greater competition, was due to the bank’s strong relationships with its customers and successful deposit campaigns. Higher deposits allowed the bank to maintain its liquidity at a comfortable level, with its loan to deposit ratio stable at 91.3 percent.
Net interest margin continues to improve due to the rising interest rate environment and strong loan growth. For the third quarter, net interest margin increased to 2.88 percent compared with 2.76 percent in the second quarter and 2.55 percent in the first quarter. Net interest income was Baht 13.9 billion, an increase of Baht 2.3 billion, or 19.8 percent, from the third quarter of 2010. Net fees and service income was Baht 4.5 billion, 3.7 percent higher than the same quarter last year.
Compared with the same quarter last year, total operating income increased 14.2 percent to Baht 21.4 billion. Total operating expenses increased 11.6 percent to Baht 8.6 billion, mostly from an increase in personnel expenses. As a result, the cost-to-income ratio decreased from 41.0 percent to 40.0 percent.
The bank’s profit before tax was Baht 11.1 billion, Baht 1.9 billion or 20.5 percent higher than the same quarter last year, and Baht 1.0 billion or 10.1 percent higher than the previous quarter.
The bank raised its interim dividend payment from Baht 1.5 in 2010 to Baht 2.0 per share this year, reflecting its successful first-half performance and strong capital position. With the inclusion of net profit for the third quarter, the capital adequacy ratio was approximately 16.6 percent and the Tier 1 capital ratio was approximately 13.2 percent.
Shareholders’ equity as of September 30, 2011 was Baht 233.6 billion or 11.6 percent of total assets. Book value per share was Baht 122.4.
"Economic condition in the fourth quarter of this year is expected to be tainted by the effect of prevailing flooding problem in certain parts of Thailand which both directly and indirectly impact the operations and well-being of businesses and consumers in the flooded neighbourhood, respectively. The bank is monitoring and evaluating the situation closely. As a member of the society, it is our strong intention to take appropriate measures to help alleviate the suffering and difficulties faced by those affected customers and community now and going forward" said Mr. Chartsiri.