RETAIL BANKING | Cesar Tordesillas, Thailand

Earnings up in first 9 months for Thai banks

Up 19 percent.

Thailand's commercial banks' posted this percentage increase in combined earnings for the first nine months with Bt134.7 billion.

This occurred despite a drop in business loans.

In the third quarter, banks showed combined net profit of Bt4.2 billion, down 8 percent from the previous quarter, because of higher loan provisions and higher taxes. Net interest margin eased to 2.54 percent.

In the quarter, they showed 14.2-percent loan growth from the same period last year. Business loans, which accounted for 70 percent of the total portfolio, slowed slightly from the second quarter but still showed 12.5-percent growth from the third quarter last year. This was largely driven by demand in the infrastructure and commerce sectors, and by small and medium-sized enterprises.

While business loans eased, consumption loans, which contributed 30.1 per cent of the total, expanded by 18.4 per cent year on year, mainly to car financing on the back of the government's first-car-buyer scheme.

Mortgage growth in the quarter expanded at the same level as in the second quarter, but consumer loans slowed slightly as post-flood consumption demand eased.

Banks' deposits and bills of exchange expanded by 12 percent year on year. 

Banks raised Bt28.5 billion through subordinated debentures in the quarter and mobilised US$2.2 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, NPLs accounted for only 2.4 per cent of total loans.

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