Thai commercial banks' combined earnings in the first nine months of this year soared 19 per cent year on year to Bt134.7 billion, despite a drop in business loans in light of economic crisis.
Anupap Kuvinichkul, a senior director for the Bank of Thailand's Financial Institutions Strategy Development, said that Thai banks have also demonstrated greater financial strengthn with the average capital adequacy ratio of 15.9 per cent (including 11.9 per cent as tier-1 capital). Several banks had issued subordinated debentures, to strengthen their tier-2 capital ahead of the activation of the Basel III standards next year.
"The levels are high and supportive to further economic expansion," he said.
In the third quarter, banks showed combined net profit of Bt4.2 billion, down 8 per cent from the previous quarter, due to higher loan provisions and higher taxes. Net interest margin eased to 2.54 percentage points.
In the quarter, they showed 14.2 per cent loan growth from the same period last year. Business loans, which accounted for 70 per cent of total loan portfolio, slightly slowed down from the previous quarter but still showed a 12.5 per cent growth from the same period last year. This was largely driven by demand in the infrastructure and commerce sectors, and SMEs. While business loans eased, consumption loans which contributed 30.1 per cent of total loans, expanded by 18.4 per cent on year - mainly due to car financing on the back of the government's first-car buyer scheme. While mortgage loan growth in the quarter expanded in the same level as the previous quarter, consumer loans slightly slowed down as post-flood demand consumption eased.
Banks' deposits and bill of exchange (B/E) expanded by 12 per cent on year. This brought down the deposit+B/E to loan ratio to 91.4 per cent.
Banks raised Bt28.5 billion through subordinated debentures in the quarter and mobilised US$2.2 billion (Bt68.7 billion) through dollar-denominated bonds.
At the end of September, non-performing loans stood at Bt264.6 billion, showing a net increase of Bt1.8 billion. However, thanks to the enlarged loan base, the NPLs accounted for only 2.4 per cent of total loans.
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Article source: http://www.thethailandlinks.com/2012/11/16/banks-9-mth-earnings-reach-bt135bn/
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