Tisco eyes record-high net profit

SET-listed Tisco Financial Group, a holding company of Tisco Bank, expects to post a record-high net profit for the whole of 2017 after doing so in the first three quarters of the year.

The company announced a record net profit for the first nine months of 4.56 billion baht, up 23% year-on-year. Net profit for the third quarter stood at 1.57 billion baht, up 25.8% year-on-year.

The healthy bottom-line growth was fuelled by higher revenue from non-interest income and a decline in loan-loss provisions, resulting in a lower non-performing loan (NPL) ratio, said group chief executive Suthas Ruangmanamongkol.

In the first nine months of the year, the bank recorded non-interest income of 4.81 billion baht, up 11.3% year-on-year. Expenses for loan-loss reserves were 1.9 billion baht, down 36.4% from the 2.99 billion recorded last year.

Meanwhile, the bank’s NPL ratio fell a bit from 2.5% last year to 2.3% as of last month.

“We booked historic net profits in the first three quarters of the year, and we expect to maintain the positive momentum throughout this year,” Mr Suthas said.

Even so, the bank shouldered a 4.4% year-on-year contraction in loans for the first nine months. Total loans fell by 0.5% quarter-on-quarter in the third quarter.

As of September, the bank’s total outstanding loans were 215 billion baht.

Mr Suthas said total loans are expected to grow by 9-10% for the full year after officially booking transferred assets from Standard Chartered Bank Thai in October. SCBT’s total transferred loans amount to 36 billion baht.

Tisco expects to book flat loans or a 1-2% contraction in the remainder of the year.

Sluggish domestic consumption is the key factor capping the bank’s loan growth. While loan demand has picked up, the bank is keeping close tabs on loan approvals and monitoring the economic picture.

Tisco has announced that it will keep its existing loan-loss reserves and NPL ratio at existing levels, at least until the end of the year, despite the SCBT asset transfer. Mortgage loans represent 66% of SCBT’s 36 billion baht worth of assets.

As a result, the bank’s proportion of retail loans will increase from 75% of its loan portfolio to 80%; auto loans, on the other hand, will decline from 65% to 60%.

TISCO shares closed yesterday on the Stock Exchange of Thailand at 86.50 baht, up five baht, in heavy trade worth 1.17 billion baht.