RETAIL INVESTMENT | Cesar Tordesillas, Thailand

Bangkok Bank ups profits c/o investment banking

Bangkok Bank recorded a net profit for the three months to 30 September 30 of US$149.4 million, with fees and service income up by 15.8 percent due largely to higher income from investment banking operations.

The figure is up by 3.6 percent from the second quarter of 2009, and 18.8 percent higher from the third quarter of 2008.

The result comes against the background of a Thai economy that has been contracting for several quarters, but which is beginning to show signs of recovery, with improvement in exports and support from government spending. Business and consumer confidence has also begun to increase.

"While it is still too early to assess with certainty the pace or sustainability of economic recovery, the bank's third-quarter improvement reflects in part better business conditions for our customers. Our continued focus on looking after asset quality and on maintaining a strong financial position will allow us to benefit from the opportunities ahead. Through it all, we will be working closely with our customers to ensure they receive the support they require, as well as targeting good-quality new customers," said Bangkok Bank President Chartsiri Sophonpanich.

"During the quarter, we saw increased demand from new customers and new loan extensions from the current ones, but due to repayments by certain large customers, our net loans have declined slightly," he added.

Although total loans were down, their rate of decline slowed markedly during the third quarter. Total loans fell slightly by 0.8 percent quarter on quarter to US$32.59 billion, after declining 6.2 percent in the year's first-half.

"The bank was successful in achieving its four major targets of continuing a healthy level of liquidity, increasing fees and service income, looking after loan quality, and maintaining a solid capital position."

Total deposits as of 30 September 2009 were US$39.8 billion, 1.7 percent higher from the start of the year but down 1.6 percent quarter on quarter. Liquidity, as measured by loan-to-deposit ratio, was 81.8 percent.

Fees and service income rose by 15.8 percent year on year. This was due largely to higher income from investment banking operations, as the bank supported bond issues by its corporate customers, and to further growth in electronic banking services, bancassurance and mutual funds.

The bank's disciplined approach to cost containment resulted in its operating expenses declining by 1.8 percent qoq and 2.6 percent yoy.

Non-performing loans fell by US$23 million qoq to US$169.7 million. The ratio of NPLs to total loans was 4.7 percent.

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