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Thailand's Siam Commercial Bank FY profit down 7 per cent

[BANGKOK]Thailand’s second-largest lender, Siam Commercial Bank Pcl (SCB), reported a 7.1 per cent fall in full-year profit on Thursday, citing lower non-interest income from its fee waiver and insurance business.

Earnings of 40.1 billion baht (S$1.71 billion) were pressured by higher expenses from its transformation programme and missed expectations of 43.1 billion baht, based on a Refinitiv poll of 20 analysts.

"Despite a slight decline in earnings, our core business remains strong while our digital customer base has become significantly larger," SCB's chief executive, Arthid Nanthawithaya, said in a statement.

SCB said the benefits of its transformation programme would be seen in 2019 and that digital customer numbers reached 9 million in 2018, with a goal of 12 million by the end of 2019.

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Higher expenses associated with the programme were temporary, and the cost-to-income ratio, which was 46.8 per cent, would improve over time, Mr Arthid said.

Loans grew 5.2 per cent year-on-year and the bank is targetting loan growth of 5-7 per cent for 2019, with a portfolio that is shifting to unsecured products and digital lending.

Non interest income was down 4.7 per cent from a year earlier, also due to lower fee income from international trade, the bank said in a statement.

The announcement comes as growth in Southeast Asia’s second largest economy slows. The World Bank on Wednesday trimmed Thai growth projections to 3.8 per cent from a previous estimate of 3.9 per cent due to a global slow down and heightened trade tensions between China and the United States.