April 20, 2017 / 1:34 PM / 2 years ago

Thailand's major banks hit by provisions, weak loans

* Top lender Bangkok Bank Q1 profit down 0.15 pct yr/yr

* Most banks report weaker-than-expected profits

* NPLs higher at most banks as economic recovery slow

By Orathai Sriring

BANGKOK, April 20 (Reuters) - Most major Thai banks reported weaker-than-expected quarterly earnings on Thursday as they booked higher provisions for bad debt, with loans weak amid a tepid recovery in the country’s economy.

Growth in Southeast Asia’s second-largest economy has lagged its regional peers despite the military government’s efforts to ramp up spending and investment.

Bangkok Bank Pcl, Thailand’s top lender by assets, reported a first-quarter net profit of 8.3 billion baht ($241.42 million), down 0.15 percent from a year earlier.

That was below the average forecast of 8.6 billion baht by four analysts polled by Reuters.

The bank’s set aside 5.8 billion baht in the March quarter, a 59 percent jump in provisions, as non-performing loans (NPLs) rose to 3.5 percent of lending from 3.2 percent at the end of 2016.

The bank’s lending contracted 0.9 percent in the first quarter from the previous three months, it said. It blamed weak domestic activity and highlighted risks, saying “the economy, despite having a better outlook, still faces a considerable degree of uncertainty.”

Third-ranked Siam Commercial Bank’s net profit rose 1 percent rise in the first quarter to 11.9 billion, but that missed market expectations. It set aside 5 billion baht in the March quarter, when NPLs rose to 2.7 percent of lending.

The fourth-biggest lender, Kasikornbank Pcl, reported a smaller-than-expected 5.4 percent rise in first-quarter net profit.

Krung Thai Bank Pcl, Thailand’s second-largest lender, reported a 13 percent rise in first-quarter net profit as provisioning expenses fell 13.5 percent.

But its non-performing loans rose to 4.36 percent of lending from 3.97 percent at end-2016, raising concern its provisioning will rise later this year.

Fitch Ratings said in January Thai banks’ profits were likely to remain under pressure from asset-quality issues and slow fee-income growth .

$1 = 34.3800 baht Editing by Larry King

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