Siam Commercial Bank reported 2018 net profit of Baht 40.1 billion





               Bangkok: Siam Commercial Bank and its subsidiaries announced net profit of Baht 7.1 billion in the fourth quarter of 2018 and Baht 40.1 billion for 2018 (based on unaudited consolidated financial statements), a 7.1% yoy decrease from a year ago. Total operating income increased 1.5% yoy to Baht 138.2 billion as net interest income (NII) rose 4.4% yoy. However, Non-NII declined 4.7% yoy mainly due to digital fee waiver, a slowdown in the insurance business, and lower fee income from international trade in the second half of 2018. Moreover, higher expenses associated with investment in the Transformation Program over the past three years had raised the Bank’s cost-to-income ratio to 46.8%. The higher cost-to-income ratio is within the expected range of 45-47% and will steadily come down as the benefits from the Transformation Program kick in, starting from 2019.


              With a view of macroeconomic uncertainty and heightened volatility expected in 2019, together with a future shift in the Bank’s loan portfolio towards unsecured products and digital lending, the Bank will be more vigilant in conducting our business. As a result, in the fourth quarter of 2018, the Bank set aside prudential provisions of Baht 8.9 billion, which strengthened NPL coverage ratio to 147% compared to 137% a year ago. With potential macro-economic headwinds and the Bank’s business directions, the credit cost is expected to be in the range of 115-135 bps in 2019, slightly above 115 bps in 2018. Non-performing loans (NPLs) stood at 2.85% at the end of December 2018 and the Bank’s capital adequacy ratio remained strong at 17.1%.


             The Bank had also made a significant progress on the implementation of the Transformation Program and expanded the digital customer base to 9 million users in 2018. Building on this momentum, the Bank will continue to capitalize on the Transformation Program by connecting new capabilities, enhancing strategic partnership, and building ecosystem/platforms with the goal of reaching 12 million digital users by the end of this year. In addition, to achieve a loan growth target of 5-7% in 2019, the Bank’s areas of focus will be consumer and small business financing, such as credit card and personal loans, as well as wealth management while deriving its comparative advantage from digitization which has lowered cost to serve and increased productivity.



Arthid Nanthawithaya, President and Chief Executive Officer, stated:  

“Despite a slight decline in earnings, our core business remains strong while our digital customer base has become significantly larger and more engaged as we continue to grow our business. The Bank’s operating cost which has risen during the high investment cycle necessitated by the Transformation Program is temporary and we expect the cost-to-income ratio to improve over time. In 2019,  we will direct our efforts towards realizing value from the Transformation Program to deliver distinctive customer experiences and differentiated value proposition. We will also focus on driving the organization to embrace a customer-centric culture with a mindset to strive for greater speed, agility and innovation while adhering to proper risk management practices. Amidst challenges from various disruptions, we remain committed to our goal of becoming the ‘Most Admired Bank’ and shaping the future of the Thai banking industry.”

Financial Highlight