Strong Non-NII and Cost Management Result in SCB’s 1Q21 Earnings Growth by 9% to ฿10Bn!

The Siam Commercial Bank Public Company Limited (SCB) has announced its 1Q21 consolidated financial statement through the Stock Exchange of Thailand as follows;

SCB reported a net profit of 10,087 million baht in 1Q21, increased 9.05% from a net profit of 9,251 million baht in 1Q20, mainly due to the strength of non-interest income businesses and its cost management.

 

Net interest income declined 9.3% YoY to 23.4 billion baht because of yield compression in the current low interest rate environment despite 8.7% YoY loan growth and lower funding costs.

 

Meanwhile, Non-interest income increased 21.2% YoY to 14.4 billion baht. Growth in non-interest income was driven by strong revenue from the bancassurance and wealth management businesses as well as mark-to-market gains on the bank’s investment portfolios.

 

Expenses declined 7.9% YoY to 15.1 billion baht due to the bank’s effective cost control and lower cost-to-serve from digital channel migration. As a result, cost-to-income ratio improved significantly this quarter to 40% from 44% in the previous year.

 

SCB set aside Baht 10.0 billion of provisions in the first quarter which were lower than the peak level last year but still remained elevated given the economic uncertainty during the COVID-19 pandemic.

 

Non-performing loan ratio increased to 3.79% at the end of March 2021 from 3.68% at the end of December 2020. The increase in NPLs reflected the bank’s conservative approach to NPL management through proactive qualitative loan downgrade and long-term value preservation workout strategy. Nonetheless, NPL coverage remained high at 139.6% in conjunction with a strong capital adequacy ratio at 18.2%.