SCB Reports ฿8.3Bn of Profit in 2Q20, Showing Better-Than-Expected Performance

The Siam Commercial Bank Public Company Limited (SCB) has announced its 2Q20 consolidated financial statement through the Stock Exchange of Thailand as follows;

SCB reported a net profit for 2Q20 at 8,359 million baht, declined 23.83% when compared to a net profit of 10,975 million baht, mainly from higher provisioning

Net interest income decreased 7% YoY to Baht 23.8 billion mainly because of compressed net interest margin following multiple cuts in the policy interest rate to a historic low. In addition, there was also a drop in NII contribution following the SCB Life divestment. Total loans declined slightly 1% YoY but rose 2% QoQ with higher loan demand from corporate customers and extension of soft loans to business customers.

SCB stated that Baht 9.7 billion of provisions were set aside in the second quarter, giving the uncertainty generated by COVID-19 and the Bank’s on-going relief programs to assist impacted customers. As government relief and stimulus measures starting to take effect, the economic impact of this pandemic will be better assessed and reflected into the Bank’s second half financial results.

Non-performing loans declined to 3.05% at the end of June 2020 given the Bank of Thailand’s current guideline on deferral of NPL classification for loans under relief programs. NPL coverage ratio increased to 152% and the Bank’s capital adequacy ratio remains strong at 18%.

 

The announcement of SCB’s profit was better than what analysts had expected. Earlier, Trinity Securities forecasted SCB’s 2Q profit to come in at 7,789 million baht, 29% lower YoY, while expecting weakness from net interest income. More importantly, the provision would stabilize, but at a high level.