BBL’s 2Q Profit Drops 67% to ฿3.1Bn, Setting ECL at ฿13.2Bn to Absorb Covid-19 Impact

Bangkok Bank Public Company Limited (BBL) has reported its 2Q20 consolidated financial statement through the Stock Exchange of Thailand as follows;

BBL reported a net profit of 3,094 million baht in 2Q20, declined 66.89% from a net profit of 9,347 million baht in 2Q19. The decrease in net profit was mainly due to an increase of 7,689 million baht in expected credit loss (ECL).

 

Net interest income increased by Baht 475 million due to a reduction in the contribution rate to the Financial Institutions Development Fund (FIDF) from 0.46% to 0.23% per annum and higher loan volume from the acquisition of Permata. Non-interest income rose by Baht 641 million due to an increase in gains on financial instruments measured at FVTPL, while gains on investments declined.

 

In 2020, BBL’s expected credit loss covers loans, interbank and money market items, debt securities which are not measured at fair value through profit or loss, loan commitments, and financial guarantee contracts. In the second quarter of 2020, expected credit loss amounted to 13,238 million baht, compared to none in the first quarter of 2019. Meanwhile, the ECL increased from 5,087 million baht in the first quarter of 2020. A high ECL was due to consideration of future economic factors that reflect the impact of the prolonged Covid-19 pandemic.

 

The Bank had loans distributed across business sectors, with 36.6% in the manufacturing and commercial sector, 22.7% in the utilities and services sector, 12.3% in the housing sector, and 9.2% in the real estate and construction sector. The increase in loans from the end of March 2020 were mainly driven by other sectors and the manufacturing and commercial sector. The increase in loans from the end of December 2019 were mainly driven by the manufacturing and commercial sector.

 

At the end of June 2020, the Bank’s loans amounted to Baht 2,353,848 million, an increase of 14.2% from the end of 2019. When excluding Permata, loans grew by 3.4% from increases in loans to businesses, in line with the projection late last year. The ratio of non-performing loans (NPL) to total loans was 4.1% and the ratio of loan loss reserves to NPL was 170.5%.