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Thai banks third-quarter earnings hit by bad loans and provisions
October 20, 2017 / 12:00 PM / in 2 months

Thai banks third-quarter earnings hit by bad loans and provisions

BANGKOK, Oct 20 (Reuters) - Thai banks reported a mix of falling earnings and tepid growth this week, booking higher provisions and being unable to create new loans.

The country’s largest bank, Bangkok Bank Pcl, said profits grew 1.2 percent, supported by increases in interest income to 16.8 billion baht ($507 million) and non-interest income, but set aside 135.8 billion baht in allowances for doubtful accounts, up from 116.7 billion the same time last year.

Growth in southeast Asia’s second-largest economy had been picking up and the government forecasts expansion of between 3.5 and 4.0 percent this year, after an increase of 3.2 percent in 2016, but Thailand still lags regional peers.

Exports have recovered this year but domestic demand remains soft, restrained by high household debt levels.

Bangkok Bank said it would continue to maintain liquidity and capital positions at levels sufficient to support future business expansion and cope with uncertainties.

Siam Commercial Bank Pcl, the second-largest bank by assets, saw profits drop 12 percent from the same time last year on higher operating costs and after taking on more provisions for loan losses.

“The bank will continue to run the business with prudence as evident by our strong capital position and high level of loan loss reserves,” SCB Chief Executive Arthid Nanthawithaya said in a statement.

The third-largest bank by assets, Kasikorn Bank, also saw profits fall after it booked higher provisions .

Smaller banks like TMB Pcl performed slightly better, but also missed market expectations. ($1 = 33.1600 baht)

Reporting by Chayut Setboonsarng and Orathai Sriring; Editing by David Holmes

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