TMBThanachart reported a net profit of THB 5,334 million for the first quarter of 2024, indicating an improvement from the same period last year. The Bank could also reduce its NPL ratio to 2.56%, while its NPL coverage ratio stayed at a robust level of 155%. With a mission to improve customers’ Financial Well-being, ttb continues to provide customers with financial support, in line with responsible lending and household debt resolution directions.

Bangkok, 19 April 2024 -- TMBThanachart Bank Public Company Limited or TMBThanachart (ttb), announced its financial performance for the 1st quarter of 2024 (1Q24). The Bank reported a net profit of THB 5,334 million, which improved from THB 4,295 million in 1Q23. Key drivers were a strategy to enhance loan mix and cost discipline. For asset quality, the Bank could continue to reduce the NPL ratio while maintaining the NPL coverage ratio and capital base at a high level. All of these reflected the Bank’s solid financial position.

Mr. Piti Tantakasem, CEO of TMBThanachart, mentioned overall, operating performance in the first quarter of the year was in line with target. Key areas included optimizing loan structure and funding cost management to enhance revenue generation, efficient cost management, and asset quality.

One of the performance highlights in this quarter was on the loan side. With a quality growth strategy, the Bank focused on customer segments that were aligned with its core strengths and expertise to understand customers' needs and risk profiles. Driven by Ecosystem play initiatives to serve car owners, home owners, and payroll customers, the Bank continued to see growth momentum in target areas, including cash your car (+4%), cash your home (+3%), and personal loans (+4%).

Notably, the Bank has continued providing financial support to all customer groups through various programs such as loan restructuring and debt consolidation with an aim to ease customers’ interest burden and to help them sustainably improve their liquidity. Currently, the Bank offers support through debt-restructure schemes, accounting for approximately 11% of the total loan portfolio. Moreover, under the Debt Consolidation Program, the number of customers increased from approximately 17,000 at the end of last year to 21,000 persons, which implied a reduction in their interest payment by approximately THB 1,400 million.

Moreover, ttb has launched a campaign called "Phi-Chit-Nee (พิชิตหนี้)”, which aims to sustainably help indebted payroll customers resolve their debt problems and eventually become debt-free. The Bank has set a target of helping 200,000 Thai people within three years. Such customers’ supports show our commitment to the Bank’s mission and the BoT’s responsible lending direction.

As a result of prudent loan growth, customer support, and proactive NPL resolution, the Bank's asset quality remained on track. The NPL ratio dropped from 2.62% at the end of last year to 2.56% at the end of the first quarter. Meanwhile, the NPL coverage ratio, which reflects risk-absorption capabilities, stayed at a solid level of 155%.

Given uncertain economic outlook, ttb will maintain prudent business direction and ensure quality of all balance sheet components. Such a direction has been our core strategy during the past years and has yielded desirable results, in line with our long-term aspirations to deliver sustainable growth. The Bank's improving performance, stable asset quality, and more robust financial position after the merger and the Covid-19 pandemic could prove our right business direction.

Details of 1Q24 key operating performance are as follows:

As of Mar-24, loans stood at THB 1,315 billion, a slowdown by 1.0% QoQ. The momentum was in line with a strategic direction of quality loan growth and loan repayment. The target segments led by cash your home, cash your car, and personal loans continued their positive trend.

Deposit stood at THB 1,373 billion, declining by 1.0% QoQ, aligned with loan growth and liquidity management plan after the Bank increased deposit base by 4.3% QoQ in 4Q23 as part of liquidity preparation plan for 2024. The QoQ decrease was primarily due to commercial deposits, while the target retail deposits, especially Time Deposit (TD), continued to grow as planned. The sufficient liquidity level will allow the Bank more flexibility to manage funding cost in the following quarters.

Regarding revenue, the shift in loan mix towards the retail segment and funding cost management continued to underpin the overall operating performance despite the challenging fee income growth, especially mutual fund fees. As a result, total operating income rose 4.7% YoY to THB 17,670 million in 1Q24. For operating expense, the figure increased by 3.7% YoY to THB 7,570 million.

The Bank continues to achieve revenue and cost alignment, as reflected by a cost-to-income ratio of 43%, in line with cost efficiency guidance albeit ongoing investment in digital capabilities.

On the asset quality front, it remained manageable as targeted, with gross NPLs totaling THB 39,759 million, declining by 3.0% from 2023, or equivalent to an NPL ratio of 2.56% compared to 2.62% at the end of 2023. In addition, in terms of investment portfolios, the Bank mainly focused on investments in government bonds and had no policy set for investments in high-risk assets. As a result, we have not been affected by recent default cases in the bond market.

With the abovementioned asset quality overview, the provision for normal business was in line with target. Moreover, we continued to strengthen the risk absorption buffer against economic uncertainty by setting aside extra provisions on top of the normal level. As a result, the total provision was THB 5,117 million. After provision and tax, the Bank reported a net profit of THB 5,334 million in 1Q24, improving from THB 4,295 million in the previous year.

Finally, on capital position front, it remained high and robust, with the CAR and Tier 1 remaining at 20.8% and 17.0%, respectively. These figures were among the top tiers in the banking industry and well above the Bank of Thailand's minimum requirement for D-SIBs at 12.0% and 9.5%, respectively.

Mr. Piti concluded, "Apart from the quality growth strategy, ttb will continuously put priority on providing financial assistance to customers, corresponding with responsible lending principles and sustainable solutions to Thailand’s household debt problem. Under the mission to improve Thais’ Financial Well-being that we have been pursuing, our supports are not limited to credit provided but also includes other financial essentials, such as savings, investment, and sufficient protection for customers at every stage of life. Our aspiration is to LEAD the CHANGE and become a transformational leader to Make REAL Change for Thais' Financial Well-being sustainably.”