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Higher provisions dent Siam Commercial Bank's FY'19 net profit

Thailand-based lender Siam Commercial Bank PCL's full-year 2019 net profit inched up 0.9% year over year as its provisions increased 50.7% on a yearly basis.

The lender reported net profit of 40.43 billion baht for the year, up from 40.07 billion baht a year ago. EPS for the period came in at 11.90 baht, up from 11.79 baht.

The S&P Global Market Intelligence consensus normalized EPS estimate for the full year was 12.82 baht.

For the fourth quarter of 2019, net profit decreased 22.3% year over year to 5.51 billion baht. EPS for the quarter was 1.62 baht.

Net interest income for the full year rose 3.1% to 99.40 billion baht from 96.37 billion baht. The bank reported a net interest margin of 3.34% for the year ended Dec. 31, 2019, up from 3.21% a year ago.

Noninterest income rose 59.3% on a yearly basis to 66.70 billion baht from 41.86 billion baht. Total operating income came in at 166.10 billion baht, up 20.2% from 138.23 billion baht.

Net fee and service income for the full year rose year over year to 29.67 billion baht from 28.46 billion baht.

Siam Commercial Bank set aside provisions for losses on loans and debt securities of 36.21 billion baht, up year over year from 24.02 billion baht. The bank said it set aside additional provisions of 9.10 billion baht on top of the normalized requirement of 27.11 billion baht due to the slower economy and its potential impact on its loan portfolio.

The bank's consolidated gross nonperforming loan ratio stood at 3.41% as of Dec. 31, 2019, compared to 3.01% at Sept. 30, 2019 and 2.85% at Dec. 31, 2018. The bank's net NPL ratio rose to 1.74% in the period from 1.48% in the previous quarter and 1.47% in the prior-year period.

At the end of December 2019, the bank's consolidated common equity Tier 1 capital ratio increased to 17.0% from 16.8% as of Sept. 30, 2019 and from 15.1% as of Dec. 31, 2018. The capital adequacy ratio was at 18.1% at Dec. 31, 2019, compared to 17.9% at Sept. 30, 2019, and 17.1% at Dec. 31, 2018.

The bank declared a special dividend of 75 satang per share to be paid out in mid-February. The final dividend will be reviewed and approved in the annual general meeting in April.

As of Jan. 17, US$1 was equivalent to 30.39 Thai baht.