Thailand's TMB Bank Q3 profit misses as bad loans provision climbs

BANGKOK, Oct 17 (Reuters) - TMB Bank Pcl, Thailand’s seventh largest bank by assets, reported a 10.4 percent year-over-year rise in third-quarter pretax profit, which fell short of market expectations as the lender’s provision to cover bad loans rose from the previous quarter.

The bank’s profit before taxes for the quarter ended September came in at 2.53 billion baht ($76.4 million), compared with analysts’ average estimate of 2.82 billion baht, according to a Reuters poll.

TMB Bank set aside 2.39 billion baht in provisions, 4.8 percent higher than the preceding quarter, to maintain a coverage ratio of 141 percent.

However, the ratio of non-performing loans (NPLs) improved to 2.44 percent, better than the 2.5 percent target it set in August.

The bank said private consumption and investment expanded, but it expected exports to slow down due to weakness in oil and agricultural prices.

However, higher government expenditure and tourist arrivals will underpin growth, the lender said.

TMB, which is 25 percent-owned by Dutch financial group ING Group, said its earnings growth was driven by net fee and service income of 2.7 billion baht, up 37.2 percent from last year.

Non-interest income also rose 18.1 percent to 3.1 billion baht from mutual fund fees and bancassurance sales, which made up 78 percent of the bank’s fee income.

The Thai finance ministry owns 25.92 percent of TMB, while the Royal Thai Army holds a 1.25 percent stake, lending the bank its original name, Thai Military Bank. ($1 = 33.1000 baht) (Reporting by Chayut Setboonsarng; Editing by Amrutha Gayathri)