Siam Commercial Bank reported Baht 11.1 billion net profit for the second quarter of 2018 and Baht 22.5 billion for the first half of 2018

Stocks and Financial Services Press Releases Friday July 20, 2018 09:09
Bangkok--20 Jul--Siam Commercial Bank

Siam Commercial Bank and its subsidiaries announced total operating income of Baht 34.3 billion in the second quarter of 2018, a 1.1% yoy increase on the back of net interest income growth of 4.7% yoy despite pressure from lower non-interest income. However, the investments in new technology platforms as part of the Transformation Program and digital acquisition activities led to a rise in operating expenses and a decline in net profit to Baht 11.1 billion, -6.7% yoy, in the second quarter of 2018 (based on unaudited consolidated financial statements). For the first half of 2018, net profit stood at Baht 22.5 billion.

Non-performing loans (NPLs) stood at 2.81% at the end of June 2018, a slight drop from 2.83% at the end of December 2017. In the second quarter of 2018, the Bank set aside Baht 5.0 billion of normalized provision which further strengthened its NPL coverage ratio to 143.5%. Moreover, the Bank's capital adequacy ratio remained strong at 17.1% which was higher than the minimum regulatory requirement.

Performance Highlights for the Second Quarter of 2018

Core business remained healthy. In the second quarter of 2018, strong loan growth of 6.7% yoy and widened net interest margin led to a 4.7% yoy increase in net interest income to Baht 23.8 billion. Non-interest income fell 6.2% yoy to Baht 10.5 billion because of the digital transaction fee waiver and a decline in net insurance premium.

Investment required for the Transformation Program temporarily raised the Bank's cost base. Total operating expenses in the second quarter of 2018 increased by 10.7% yoy, mainly from investments in major transformation projects, new technology platforms, and digital acquisition, resulting in a decline in net profit.

SCB Transformation Program

The Transformation Program has enabled the Bank to rapidly expand its digital customer base with a new mobile banking platform "SCB EASY." This new digital platform currently has 7.0 million users and, by the end of this year, the Bank expects the number of SCB EASY users to reach 9-10 million and the number of merchants with QR-code based payment to grow to 1.2-1.5 million.

With the rapid expansion of its digital customer base and deeper customer engagement, the Bank has been able to significantly lower its cost of deposit and cut down the number of traditional branches (by approximately 100 branches in the first half of the year) while maintaining the overall service quality and customer satisfaction. Furthermore, the Bank has introduced new service channels, such as Investment Center and Business Center, to meet diverse needs of different customer segments.

Arthid Nanthawithaya, President and Chief Executive Officer, stated: "Despite challenges from digital disruption and intense competition, our core business remains robust and, through the Transformation Program, we have made good progress toward positioning our Bank to capture new business opportunities in the digital age. In fact, the initial impact of the Transformation Program has already been felt this year as evidenced by a rapid expansion of our digital customer base, improved customer engagement, and the cost savings from digital migration. The current high investment cycle will exert pressure on the bottom line, especially in the near term. Nonetheless, the performance overall should gradually improve as all major projects and investments associated with the Transformation Program will be commissioned by the end of this year and the benefits from the Program continue to roll in."

Siam Commercial Bank PCL is one of Thailand's leading universal banks. Established by Royal Charter in 1906 as the first Thai bank, SCB ranks number 2 in market capitalization among Thai financial institutions as of the end of June 2018 (Baht 403 billion). Its network of branches and service points offers nationwide coverage with 1,056 branches. (If investment centers, business centers, and service centers were to be included, the total number of branches would be 1,069). In addition, the Bank has 104 foreign exchange kiosks, and 9,590 ATM machines to provide services that meet the demands of all customer groups, including corporate, SME and retail customers. The Bank's total assets are Baht 3,100 billion. More information is available on the Bank's website at www.scb.co.th.


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