UPDATE 1-Thai Tisco sees higher 2010 earnings, but Q3 falls

Mon Jul 19, 2010 2:34am EDT

* Says Q3 net profit to fall from 763 mln baht in Q2

* but stronger loans to push 2010 earnings up from last year

* Sees bank loan growth of as much as 15-17 pct this year (Adds details, quote)

BANGKOK, July 19 (Reuters) - Thailand's Tisco Financial Group (TISCO.BK) said on Monday that improvements in the economy would boost its lending this year and net profit was likely to rise from the 1.99 billion baht ($61.8 million) it made in 2009.

However, third-quarter net profit should be lower than the 763 million baht it earned in the previous quarter when it booked an extraordinary gain from asset sales, Chief Executive Officer Oranuch Apisaksirikul told reporters.

Fifteen analysts polled by Thomson Reuters StarMine forecast a net profit of 2.74 billion baht for 2010.

The holding firm owns Tisco Bank, the country's second-largest car loan lender, and also has brokerage and asset management businesses.

"Economic growth helped boost car sales and our lending already grew 13 percent in the first six months. It's possible that 2010 lending could grow 15-17 percent," Oranuch said of the bank unit, which is targeting 10 percent loan growth.

In June, Thai car and truck sales rose 62.6 percent from a year earlier to a 10-year high, buoyed by demand for small cars and a pick-up in consumer confidence, according to industry data.

Last week, the company reported a 52 percent rise in second-quarter net profit to 763 million baht, helped by gains from advisory fees and sales of foreclosed assets.

Tisco Bank had assets of 148 billion baht and loans of 126 billion baht as of June. Its hire purchase loans accounted for 75.3 percent of its total lending.

It asset quality was improving with the economy, Oranuch said, so Tisco's non-performing loans should be stable at 2.0 percent of lending this year.

Tisco also expected its net interest margins to be flat at 4.60 percent this year, as rising interest rates would boost funding costs at a faster pace than loan yields, Oranuch said.

It reported a margin of 5.3 percent in the first six months.

At the midday break, Tisco shares were down 0.87 percent at 28.50 baht, while the main Thai index .SETI was up 0.17 percent. ($1=32.22 Baht) (Reporting by Manunphattr Dhanananphorn; Writing by Arada Kultawanich; Editing by Alan Raybould)

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