Siam Commercial Bank loans up 3.3% in 4Q13

Thanks to strong growth in these areas.

According to Maybank Kim Eng, Siam Commercial Bank's 4Q13 loans grew 3.3% QoQ, driven by strong growth in SME, housing and personal loans.

Here's more:

Net interest income was better than expected given solid loan growth of 12% with stable NIM of 3.18% in 2013. Non-interest income grew 24% YoY due to healthy net fee income and net trading income. Loan loss provisions jumped 45% YoY as the bank has a policy to book extra provisions from extra gains or income.

We expect SCB loan growth of 8% this year. NIM could drop 4bps to 3.14%, due to the recent interest rate cut, although the bank plans to reduce the deposit cost. We do not include gains on sales of Siam Commercial Samaggi Insurance, which we estimate the bank to book a THB1.6b gain in 2Q14.

This could provide upside to our earnings forecast of 3% in 2014. We prefer KBANK to SCB as we are cautious on credit quality deterioration on the retail loan segment, which is 45% of SCB’s loan books owing to elevated household debt levels.

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