Bangkok Bank Profit Beats Estimates on Fees, Investment Gains

Bangkok Bank Pcl (BBL), Thailand’s largest lender by assets, reported profit that exceeded most analysts’ estimates in the second quarter on rising fee income and investment gains.

Net income rose 18 percent to 10.25 billion baht ($330 million), or 5.37 baht per share, in the three months ended June, compared with a restated 8.66 billion baht, or 4.54 baht, a year earlier, Bangkok Bank said in a regulatory filing. That compared with the 9.31 billion-baht average estimate of 19 analysts surveyed by Bloomberg.

Bangkok Bank’s total loans increased 8.1 percent in the past year, even as the pace of growth in Thailand’s $346 billion economy slowed. The central bank is scheduled to reduce its forecast for growth tomorrow, saying on July 10 that the economy will expand less than 5 percent this year.

“Lending is continuing to grow, driven mainly by the corporate and small and medium-sized business sectors, which are investing to increase their production capacity or to expand their businesses,” President Chartsiri Sophonpanich said today in a separate statement, describing the bank’s first-half results as “satisfactory.”

Bangkok Bank’s net-interest income, or the difference between what it makes from lending and pays on deposits, was at 13.9 billion baht, almost unchanged from the same period last year. Net fee and service income jumped 21 percent to 5.69 billion baht, mainly from mutual funds and insurance products.

The bank recorded 915.5 million baht in gains from investments and 2.82 billion baht in gains from foreign operations in the quarter. Its net interest margin narrowed to 2.41 percent in the first half, compared with 2.49 percent in the previous six months, partly because of lower returns from lending, interbank and money markets, it said.

Bangkok Bank set aside 3.38 billion baht in provisions in the quarter, compared with 1.66 billion baht a year earlier, taking its loan-loss reserve coverage on non-performing loans to 206 percent. The ratio of bad debts to total lending was 2.4 percent at the end of June, it said.

To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net.

To contact the editor responsible for this story: Tony Jordan at tjordan3@bloomberg.net

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