BANGKOK, Jan 18 (Reuters) - Thailand’s second largest lender by assets, Siam Commercial Bank (SCB), reported a net profit of 43.1 billion baht ($1.35 billion) for its 2017 fiscal year on Thursday, down 9.4 percent from 47.5 billion baht in 2016.
The bank missed market expectations of a net profit of 45 billion baht based on 24 analysts polled by Thomson Reuters.
Earnings were held back by higher provisions, which were set at 25 billion baht or 1.26 percent of total loans, 11.3 percent higher year-on-year.
Higher provisions were set to align existing expected loss principles to those required under new accounting standards effective in 2019, SCB said in a statement.
Operating expenses were 11.6 percent higher than a year ago after it invested in digital banking technology to expand the customer base.
The bank was moving into “the digital arena” and expanded its retail segment through new QR code payment technologies, Chief Executive Arthid Nanthawithaya said in a statement.
The non-performing loans ratio increased to 2.83 percent from 2.67 percent in 2016.
“The bank saw positive loan growth in the corporate and retail segments as economic conditions began showing signs of improvement, boosting interest income,” the statement said.
Net interest income for the year was 136 billion baht, up 2.2 percent from 2016.
The bank’s shares closed down 3.1 percent before the results were released.
The Thai state planning agency predicts GDP growth of 3.9 percent for 2017 and 3.6-4.6 percent for 2018. Official 2017 GDP data is due to be released next month ($1 = 31.9100 baht) (Reporting by Chayut Setboonsarng; Editing by Adrian Croft)