ข่าวประชาสัมพันธ์ Press Releases ข่าวย้อนหลัง หัวข้อข่าว บลอก

Siam Commercial Bank's Preliminary Results for 2002 and Provisioning Policy

Stocks and Financial Services Press Releases วันจันทร์ที่ ๒๐ มกราคม พ.ศ. ๒๕๔๖ ๐๙:๐๘ น.
ขนาดตัวอักษร: ใหญ่ กลาง เล็ก
Bangkok--Jan 20--SCB

Since the advent of economic crisis in 1997, which left Thai banks, Siam Commercial Bank (SCB) included, with huge asset quality problems, squeezed profitability, and the ensuing need for capital replenishment, SCB has worked hard to resolve its problems and pursue strategies to revitalize the Bank and reposition the Bank so that it can operate competitively. SCB has since 1999 pursued a 3-pronged strategy

  • Recapitalization: The Bank raised Baht 65,000 million in pure equity in May 1999 to strengthen its capital base. As at 3Q02, the Bank's total capital funds to risk assets ratio was 16.6% and the highest among large Thai banks.
  • Restructuring:   Resolving problem loans through debt restructuring, litigation, and write-offs have reduced problem classified loans from a peak of Baht 234,930 million at the end of 1998 (42.5% of total loans) to Baht 119,704 million (24.3%) at the end of 2002 (preliminary figure).
  • Reorganization: To reposition the Bank and to enhance its competitiveness to meet future challenges, SCB has rearranged its organization structure and business model, in particular, through the Change Program's implementation in 4Q02.

Implementation of the above strategies has resulted in continuous improvements in the Bank's operating performance.   Net profit before provision increased from Baht 4,681 million in 1999 to Baht 9,816 million and Baht 9,612 million in 2000 and 2001 respectively, and Baht 12,338 million for 2002 (preliminary figure).

During the same period of time the Bank has realized that uncertain prospects of an economic recovery would lead to asset quality problems due to erosion of collateral value or failure of debtors to meet debt restructuring obligations.   Therefore over the past 3-4 years SCB has continued to build up its loan loss reserves over the level required by Bank of Thailand. In addition, international credit rating agencies and securities analysts maintained that Thai banks need larger provisions to accommodate potential loan losses.

The Bank management thus initiated refinement of its credit review process for corporate loans as well as SME and consumer loans according to the international best practices. The process began in the third quarter of 2002 and was completed in the fourth quarter.   Management subsequently presented the result to the Board for consideration.

With the objective of increasing shareholder value in the long term, the Board of Directors of Siam Commercial Bank, at its Meeting on 17 January 2003, considered a policy concerning the Bank's preliminary result for the year 2002 and loan loss provision and resolved that:

1. The Bank make Baht 16,646 million provision in the fourth quarter of 2002, leading to a full-year provision of Baht 24,825 million. This amount will enable the Bank to fully accommodate future deterioration in quality of existing problem classified loans. As a result, the Bank's loan loss reserves as at the end of 2002 will reach Baht 79,807 million and loan loss reserves to classified loans will increase to 66.7%, which will be one of the highest ratios among Thai banks.

Consequently, the Bank would record a net loss of Baht 12,488 million for 2002. Capital funds at end 2002 would amount to Baht 62,028 million(14.0%), with Baht 36,121 million in tier-1 capital and Baht 25,907 million in tier-2 capital. Tier-1 capital ratio would be 8.2% and higher than the 4.25% required by BOT, and tier-2 ratio will be 5.9%.

In addition, the Board endorsed the management's proposal, as part of its prudent policy on asset quality, to set a general loan loss provision of approximately Baht 200 million monthly starting from January 2003. The aim is to build it up to a target of 2% of loans net of problem classified loans already provided for at end 2002.

2. A proposition be tabled before shareholders in the 2003 annual general meeting to wipe out retained losses according to the Public Limited Companies Act, in preparation for dividend payment. The Board views that the Bank has sufficient reserves, as allowed by the law, to wipe out retained losses. After this loan loss provision, the Bank would be able to book net profits and to pay dividend going forward.

The Board is confident that the above measures together with the efforts to increase operating revenues, control costs, and enhance efficiency will increase the Bank's return on equity to levels satisfactory to its shareholders from 2003 onward.

Attachment: Preliminary Financial Statements for the Year 2002.
For more information, please contact:
Investor Relations Team
The Siam Commercial Bank PCL
Tel: 02-544-4206-7, 02-544-4212
www.scb.co.th
Attachment: The Siam Commercial Bank PCL's operating results before being audited by an independent auditor.
Summary of significant unaudited operating results for the fourth quarter of 2002 and for the year ended 2002.

1. Net interest and dividend income: The Bank posted net interest and dividend income before loan loss reserve of Baht 4,412 million in the fourth quarter of 2002, a slight decrease from Baht 4,588 million in the previous quarter. The decrease was mainly due to interest rate reduction in October, which resulted in an immediate decrease in interest income as most loans are based on floating rates. Interest expenses, however, decreased slightly because interest rates on a major portion of deposits are fixed rates.

For the year ended 2002, net interest and dividend income was Baht 17,483 million, an increase of Baht 1,405 million or 8.7% from last year owing to effective liquidity management, better yield from restructured loans as well as an improvement of loan to deposit ratio.

2. Non-interest income: Non-interest income was Baht 2,194 million in the fourth quarter of 2002, a slight increase from Baht 2,145 million in the previous quarter due to a steady gain from investment, foreign exchange as well as profitability of subsidiary and associated companies.

For the year ended 2002, non-interest income was Baht 8,967 million, an increase of Baht 2,354 million or 35.6% from last year, thanks to Baht 923 million increase in foreign exchange gain arising from fluctuations in exchange rates and more foreign exchange transactions. In addition, the Bank recorded higher fee and service income of Baht 549 million (10.7%) mainly due to credit card business, loan arrangement and the selling of capital market instruments. The Bank had net gain from equity sales of Baht 720 million, compared to a net loss of Baht 285 million last year.

3. Non-interest expenses: Operating expenses (excluding special expenses from   provision for diminution in value of foreclosed properties) were Baht 3,493 million, an increase from Baht 3,239 million in the previous quarter. The increase was from the rise in interchange fee incurred from expansion of credit card and ATM businesses and reserve for promotion campaigns.

Operating expenses for the year ended 2002 were Baht 13,212 million, an increase from Baht 12,979 million a year earlier. However, operating cost to income ratio improved to 52.6% from 58.2% last year.

In 2002, the Bank set provision for diminution in value of foreclosed properties of Baht 900 million, compared with Baht 100 million last year, to accommodate impairment of some types of properties. This resulted in a rise in non-interest expenses to Baht 14,112 million, compared with Baht 13,079 million a year ago.

4. Loan loss reserve: In 2002, the Bank made additional loan loss reserve of Baht 24,825 million (Baht 9,207 million was made in 2001). Total loan loss reserve stood at Baht 79,807 million as at December 31, 2002. The coverage ratio (LLR/Problem Classified Loans), consequently, improved to 66.7%.

5. Summary of operating results: In the fourth quarter of 2002, net loss of Baht 13,533 million was reported, compared with net profit of Baht 355 million in the previous quarter. For the year ended 2002, net loss was Baht 12,488 million, compared with net profit of Baht 405 million last year. However, net profit before loan loss reserve was Baht 3,113 million in the fourth quarter, compared with Baht 2,924 million in the former quarter. For the year ended 2002, net profit before loan loss reserve was 12,338 million, an increase from Baht 9,612 million a year earlier.

Balance sheet as at December 31, 2002

1. Loans: Total loans outstanding before allowance for doubtful accounts were Baht 485,111 million as at December 31, 2002. Net loans and accrued interest after loan loss reserve were Baht 407,793 million, a 6.3% decline from December 31, 2001. This was mainly due to additional loan loss provision of Baht 24,825 million made in 2002 and transfers of Baht 3,811 million in loans (net book value) to The Thai Asset Management Corporation. Compared with the previous quarter, net loans and accrued interest decreased by Baht 1,693 million or 0.3%.

2. Deposits: Total deposits stood at Baht 568,602 million, a decrease of Baht 32,388 million or 5.4% from the end of last year, mainly as a result of withdrawals for Government savings bond investment.

3. Shareholders' equity: Shareholders' equity stood at Baht 52,118 million. Total capital funds (tier 1 and tier 2) were Baht 62,028 million or approximately 14.0% of total risk assets, of which approximately 8.2% was tier 1 capital.

Problem Classified Loans

Problem Classified Loans (Substandard and lower) as at December 31, 2002 amounted to Baht 119,704 million or 24.3%, a decline from Baht 121,688 million or 24.3% from the previous quarter. Non-performing Loans as per BOT new definition at the end of 2002 was Baht 118,257 million or 24.2%.   End.

-SN-

ขนาดตัวอักษร: ใหญ่ กลาง เล็ก

ข่าวประชาสัมพันธ์ที่เกี่ยวข้อง

The Asset's best domestic commercial bank in Thailand

Khunying Jada Wattanasiritham, president and chief executive officer, Siam Commercial Bank Siam Commercial Bank (SCB) has come a long way since the Asian financial crisis in 1997, which left the Thai banking system in tatters with huge asset quality probl...

Thai: Siam Commercial Bank reports profit increased by Baht 3,077 million in 1Q03

Reference is made to the copy of the preliminary balance sheet as at March 31, 2003 and the preliminary statements of income, before being reviewed by the independent auditor, for the quarter ended March 31, 2003 and the announcement of the results of ope...

Siam Commercial New York Life Targets New Business Growth of 50% for 2003, plans to be a "Top Five Life Insurance Company by 2007"

Siam Commercial New York Life Insurance Public Company Limited (SCNYL) today announced that they expect their total new business sales to increase by more than 50 per cent during the year 2003. The company also said that it was very pleased with the resul...

หัวข้อข่าวที่เกี่ยวข้อง

หัวข้อข่าวยอดนิยม

กรมสรรพากร ธนาคารกรุงเทพ ธนาคารกรุงไทย ธนาคารออมสิน ไปรษณีย์ไทย การบินไทย ธนาคารกสิกรไทย hotmai เพียวริคุ jobbkk ธนาคารไทยพาณิชย์ คาราบาว ดีแทค ไทยพาณิชย์ แจ่มใส เมเจอร์ ธนาคารอาคารสงเคราะห์ 12car กรุงไทย ธนาคารกรุงศรีอยุธยา กระทรวงสาธารณสุข การรถไฟแห่งประเทศไทย มิตซูบิชิ เมืองทอง ธนาคารทหารไทย ตลาดหลักทรัพย์แห่งประเทศไทย ซัมซุง มาม่า วันทูคอล ธนาคารแห่งประเทศไทย กระทรวงพาณิชย์ เวลาประเทศไทย ปตท ธอส บิ๊กซี กรมอุตุ กรมศุลกากร แม็คโคร ธนาคารกรุงศรี กระทรวงการคลัง