LHFG Q4 net profit gains, impairment dips

Land and Houses Financial Group Plc (LHFG), the parent of LH Bank, has delivered a 16.8% year-on-year increase in its unaudited net profit during the three months to December, largely helped by a sharp decline in impairment charges for credit losses.

Its solid fourth-quarter earnings suggest the possibility that other small banks could post robust net profits. LHFG’s earning announcement marked the start of banks’ earning season.

The company’s net profit amounted to 729.6 million baht, up from 624.4 million over the same period a year earlier, it said in a filing to the Stock Exchange of Thailand.

LHFG set aside 130 million baht as a loan-loss provision for the fourth quarter, down 40.9% from a year earlier.

The firm said the bank’s gross non-performing loans (NPLs) climbed 18% to 3.26 billion baht and its NPL ratio was 1.88% at the end of 2017.

LH Bank’s coverage ratio stood at 186% at the year-end.

LHFG’s fourth-quarter net interest income, which rose 4.3% year-on-year, also gave a boost to its quarterly net profit.

Higher net interest income could be attributed to a 9.1% increase in LH Bank’s loan portfolio to 154 billion baht, with 65.5% corporate loans, 18.9% retail loans and the remainder small and mediumsized enterprises loans.

The financial group’s net non-interest income for 2017 edged down by 2.2% yearon-year to 418 million baht, the filing stated.

The bank’s capital adequacy ratio tallied 21.9%, well above the Bank of Thailand’s minimum requirement of 9.75% and up significantly from 13.7% at the end of 2016.

Taiwan-based CTBC Bank’s recent acquisition of a 36% stake in the LH Bank’s parent, LHFG, strengthened the bank’s capital buffer and helped expand business.

LH Bank maintained its number of branches at 133 across Thailand at the end of last year.

LHFG saw its net profit fall by 3.4% to 2.6 billion baht last year, though its loan-loss provision dropped by almost 40% to 617 million baht at the end of 2017.

Its net non-interest income, which dropped by 28.8% to 1.51 billion baht, also took a toll on LHFG’s 2017 earnings.

LHBANK shares closed yesterday on the Stock Exchange of Thailand at 1.73 baht, an increase of two satang, in trade worth 16.6 million baht. it