Siam Commercial Bank and its subsidiaries reported consolidated net profit (based on unaudited financial statements) of Baht 8.4 billion for the second quarter of 2020. While net profit fell 24% yoy mainly from higher provisioning, pre-provision operating profit increased 4% yoy. For the first half of 2020, net profit fell 13% yoy to Baht 17.6 billion while pre-provision operating profit still grew 15% yoy.


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.


Non-interest income increased 19% yoy to Baht 12.5 billion largely from improved income from wealth and bancassurance businesses as well as one-time gains on sale of investments and corporate deals. Given an abrupt halt in economic activity during the COVID-19 lockdown in the second quarter, business volume was down significantly from April but showed early signs of recovery in June as lockdown restrictions were gradually eased.


Operating expenses decreased 3% yoy to Baht 16.1 billion due to lower overall spending during the nationwide lockdown and the Bank’s effective cost control measures. The Bank’s cost-to-income ratio for the second quarter was relatively stable at 44.5%.


Given the uncertainty generated by COVID-19 and the Bank’s on-going relief programs to assist impacted customers, Baht 9.7 billion of provisions were set aside in the second quarter. 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%.




Arthid Nanthawithaya, Chairman of the Executive Committee and CEO, stated:

“The impact of the pandemic on the Bank’s top-line performance and earnings outlook has started to be felt this quarter. Nevertheless, we are confident that the Bank's strong capital position and high loan loss provisions will enable us to weather this recession. Since the start of the pandemic, the Bank has assisted more than 1.1 million retail customers and over 13,000 business customers, ranging from SMEs to corporations, with Baht 840 billion worth of loans under relief programs, or 39% of the Bank’s total loans, at the end of June 2020.  Moreover, the Bank has used SCB EASY app to facilitate the request process for customers seeking assistance and launched a food-delivery platform, ROBINHOOD, to assist restaurant operators and retail customers in general. Although economic activity has begun to recover, the long-term impact of this pandemic on the business sector still remains highly uncertain. During this challenging time, the Bank will continue to support impacted customers so that we all, including our community at large, can get through this crisis together. At the same time, the Bank remains committed to its long-term goal of developing digital innovation to generate sustainable growth.”




SCB – Financial Highlight