In the first quarter of 2014, the Bank has adopted cautious measures to cope with the economic uncertainties, especially in loan expansion efforts. As a result, total loans in this quarter increased slightly to THB1,200 million or 0.3% from the end of 2013. Total deposits continued to grow by THB29,000 million or 5.5%, backed by retail deposit growth especially the high-benefit deposit products, including No Fixed and ME as well as the transactional accounts which are the Bank’s core focus. The loan growth rate and declining market interest rates lowered the net interest margin to 2.87% from 2.95% YoY. Still, net interest income rose by 6%.
Non-interest income for the quarter dropped 10 % YoY due to fee income decrease because of the sluggish mutual funds sales amidst the unfavorable market conditions and lower loan-related fees as the Bank tightened up lending policy, especially for new customers. Trade finance fees went up slightly. As a result, total operating income increased marginally by 1%. Operating cost rose due to human resources, branch premises and marketing costs. In consequence, the Bank’s net profit fell from the same quarter of last year.
Mr. Boontuck Wungcharoen TMB CEO said, "In 2014, the Bank gives priority to quality growth and stability. We continue to focus on growing our transactional banking deposit accounts. However, we have revised our loan growth target down to be at around 6-8% and emphasized on maintaining asset quality. In this quarter, despite unfavorable economic factors, NPL ratio of the bank and subsidiaries was stable at 3.85%. We have also continued to keep a high level of coverage ratio at 138%, and a strong capital base under the Basel III Accord guidelines, with CAR at 15.3% of which 10.5% is Tier 1 capital. The percentages are higher than the minimum requirements of the Bank of Thailand which are set at 8.5% and 6.0% respectively.
Mr. Boontuck added, "In the remaining quarters of the year, the TMB will continue to operate carefully. Nevertheless, we plan to introduce new products to the market to create real value for customers, and drive operating efficiency to fuel growth as well as strong performance to sustain shareholders’ return.”