Bangkok Bank Fourth-Quarter Profit Rises 40% on Lower Provisions

Bangkok Bank Pcl (BBL), Thailand’s biggest by assets, said profit rose 40 percent in the fourth quarter as provisions for bad loans declined.

Net income rose to 8.26 billion baht ($278.7 million) in the three months ended December, compared with 5.91 billion baht a year earlier, Bangkok Bank said in a statement today. That compared with the 8.13 billion-baht average of 16 analyst estimates compiled by Bloomberg. Impairment provisions for loans and debt securities fell 64 percent to 2.51 billion baht.

Demand for credit is surging in Thailand as companies rebuild businesses that were devastated by floods at the end of 2011 and government incentives encourage people to buy cars and homes. The finance ministry last month raised its 2012 economic growth forecast to 5.7 percent and said the economy may have expanded 15 percent in the fourth quarter because of stronger- than-expected private consumption and stimulus spending.

“We registered positive loan growth in 2012, exceeding our targets in many segments, most notably corporate and SME lending,” Bangkok Bank President Chartsiri Sophonpanich said in a separate statement.

Net-interest income, the difference between what the company makes from lending and what it pays on deposits, fell 0.5 percent to 13.8 billion baht in the fourth quarter from a year earlier. Non-interest income climbed 22 percent to 4.99 billion baht. For the full-year, net-interest income rose 4.2 percent and income from fees and services climbed 5.5 percent.

Full-year profit rose 21 percent to 33 billion baht and its loan portfolio expanded 9.1 percent to 1.6 trillion baht, the bank said. Non-performing loans stood at 2.3 percent of total lending, compared with 2.7 percent at the end of 2011. Net non- performing loans were at 0.58 percent of its total portfolio.

The lender expects lending to expand as much as 9 percent this year based on the assumption that Thailand’s gross domestic product will increase by between 5 percent and 6 percent, Chartsiri said on Jan. 8.

To contact the reporters on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net; Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editors responsible for this story: Tony Jordan at tjordan3@bloomberg.net; Lars Klemming at lklemming@bloomberg.net

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