Thailand’s economic growth in 2018 is expected to be 4.1 percent, up from 3.9 percent in 2017. While exports weakened in the second half of the year amid slower world trade and risks from the US trade policies, domestic demand continued to firm up. Private consumption growth was stronger than expected with a boost from auto sales volume, and private investment continued to increase with capacity expansion in sectors such as automotive and petrochemical which serve the growing demand domestically. In terms of digital banking, digital trends provided opportunities to offer financial services through a variety of convenient digital channels while creating more competition. In early 2018, commercial banks announced the exemption of transaction fees via digital channels to meet customers’ changing lifestyle. Going forward, Thailand’s economic growth in 2019 is expected to be moderate given global slowdown, uncertainties over the US trade policies and retaliatory measures of major trading partners. Nevertheless, public policy continuity—including the implementation of infrastructure projects such as the Eastern Economic Corridor (EEC)—will be key to underpinning private sector sentiment and, thus, bolstering private investment. Moreover, there are opportunities from production relocation to Thailand.
Within the context of the current economic environment, Bangkok Bank has continued to maintain its sustainable growth with its prudent approach towards financial management, maintaining liquidity and capital reserves at appropriate level to support future business expansion, and to ensure the Bank’s financial sustainability in the face of future uncertainties.
Bangkok Bank and its subsidiaries reported a net profit attributable to owners of the Bank of 35,330 million baht, an increase of 7.0 percent from 2017. Operating income amounted to 121,401 million baht, an increase of 7.9 percent, driven by an increase of 7.1 percent in net interest income with a net interest margin of 2.40 percent, and an increase of 9.1 percent in non-interest income contributed by increases in gains on tradings and foreign exchange transactions and gains on investments. Despite the exemption of transaction fees via digital channels, net fees and service income were close to the level of the previous year due to good growth in fee income from bancassurance and mutual funds. The ratio of expenses to operating income was 45.4 percent.
At the end of December 2018, the Bank’s loans amounted to 2,083,160 million baht, an increase of 4.0 percent from the end of 2017, driven by loans to large corporates, consumers, and through the Bank’s international network. The ratio of non-performing loan (NPL) to total loans was lower to 3.4 percent, while the ratio of loan loss reserves to NPL was 190.9 percent.
With the inclusion of net profit for the second half of 2018 (July to December), the total capital adequacy ratio, the Common Equity Tier 1 capital adequacy ratio and the Tier 1 capital adequacy ratio of the Bank and its subsidiaries would be approximately 18.7 percent, 17.2 percent and 17.2 percent, respectively. These capital adequacy ratios are above the Bank of Thailand’s minimum capital requirements. Shareholders’ equity attributable to owners of the Bank, as of December 31, 2018, amounted to 412,814 million baht. The book value per share was 216.26 baht.
