January 12, 2017 / 9:51 AM / a year ago

UPDATE 1-Thailand's Tisco sees stable or slightly lower loan spread in 2017

* Loan spread to be 4.5 percent or lower this year

* Non-performing loans to remain near last year’s 2.54 percent

* Reports 17.8 percent y/y rise in 2016 net profit (Adds bullet points, detail, context)

Jan 12 (Reuters) - Thailand’s Tisco Financial Group Pcl expects its loan spread - the difference between interest paid on deposits and earned from loans - to remain stable or fall slightly in 2017 from last year, the company’s chief executive said on Thursday.

The company’s loan spread this year could be 4.5 percent or less, Suthas Ruangmanamongkol told a press conference in Bangkok. The group owns Tisco Bank, one of Thailand’s top five auto loan providers.

“Economy should expand this year, but there is a tendency for interest rates to go up. This could raise the cost of funding,” he said. “We will try to control costs in other aspects,” said Suthas, who expects the company’s non-performing loans to remain near last year’s 2.54 percent.

This should result in a slightly lower loan loss provision than last year’s 3.97 billion baht ($112.34 million).

The group has forecast a 15 percent loan growth this year after transferring retail banking business from Standard Chartered Bank (Thai).

However, Tisco’s own loan portfolio will remain stable at 225 billion baht ($6.37 billion), Suthas said. Last year, total loans fell 5.6 percent.

The company posted a net profit of around 5 billion baht ($141.48 million) in 2016, a 17.8 percent increase from 2015, according to a company statement. Suthas gave no forecasts for profits on Thursday.

$1 = 35.3400 baht Reporting by Manunphattr Dhanananphorn; Writing by Patpicha Tanakasempipat; Editing by Himani Sarkar

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