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Thai Bank posts over 30% drop in 2017 profit on higher provisions
[BANGKOK] Krung Thai Bank Pcl, Thailand's fourth largest lender by assets, posted a more than 30 per cent drop in 2017 profit and missed analysts'expectations, hurt by higher provisions for impairment.
Profit in 2017 dropped 30.5 per cent from the previous financial year to 22.45 billion baht (S$930.3 million). This compared with expectations of 25.5 billion baht in a Thomson Reuters poll of 23 analysts.
Krung Thai set aside provisions of 44.8 billion baht for impairment, 34.1 per cent more than the previous financial year, to prepare for future standards, the state-owned bank said in a statement.
Net interest income dropped 1.37 per cent to 85.8 billion baht, while net fee and service income rose nearly 9 per cent to 1.9 billion baht.
Although the Thai economy grew on the back of exports and tourism, private investment remained low, private consumption was suppressed and higher household debt lowered purchasing power from low-income households, the bank added.
Krung Thai's annual results follow a series of missed earnings reports from other major Thai banks.
"This is a challenging era for the industry," Siam Commercial Bank Pcl (SCB) CEO Arthid Nanthawithaya told a press conference on Monday, referring to stiff competition and a decline in fee-based earnings.
SCB said it plans to reduce the number of traditional branches to 400 by 2020 from around 1,100 to tighten costs and focus on digital offerings, and that it targets a loan growth of 6 percent-8 percent this year.
SCB last week reported a 9.4 per cent fall in 2017 earnings.