UPDATE 1-Siam City Bank sees 2008 net profit, keeps loan target

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BANGKOK, July 31 (Reuters) - Siam City Bank PCL SCIB.BK, Thailand's seventh-largest lender, said on Thursday it expected its 2008 net profit to be more than 3.0 billion baht ($89.60 million), turning from a net loss in 2007.

The state-run bank maintained its loan growth target of 12 percent for the year and aimed to cut non performing loans to five percent of lending by the end of 2008 from 6.84 percent last year, Chief Executive Officer Chaiwat Utaiwan said.

"We should have a net profit of more than three billion baht," he told reporters on the sidelines of a financial industry conference. "Fee income will be a key earnings driver."

Chaiwat has said the bank would cut its loan growth target to 8 percent due to a conservative lending policy at a time of decade-high inflation and political uncertainty that has weakened business confidence.

SCIB, 47.6 percent owned by the central bank's rescue arm, posted a net profit of 2.02 billion baht for the first six months of this year.

Seventeen analysts polled by Reuters had forecast an average net profit 3.88 billion baht for full-year 2008 against a net loss of 1.93 billion baht for 2007.

Shares in the firm, valued at $878 million on the Thai bourse, were down 2.9 percent at 13.50 baht, near a two-week low, at 0454 GMT while the main Thai stock index .SETI was up 0.33 percent. ($1=33.48 Baht) (Reporting by Manunphattr Dhanananphorn; Writing by Viparat Jantraprap; Editing by Ed Cropley)