TMBThanachart Q1 2024 net profit at THB5,334 million

TMBThanachart Bank Public Company Limited disclosed its financial performance for the first quarter of 2024 (1Q24). The bank showcased a notable increase in net profit, reaching THB 5,334 million, up from THB 4,295 million in 1Q23. This advancement was chiefly propelled by a strategic focus on optimizing loan composition and exercising stringent cost controls. Notably, the bank sustained its robust financial stance by effectively managing asset quality, evident in the continuous reduction of the NPL ratio while upholding high NPL coverage and capital reserves.

Piti Tantakasem, CEO of TMBThanachart, remarked that the bank's operational performance for the initial quarter of the year was in alignment with predetermined objectives. Key highlights encompassed the refinement of loan portfolio structure, meticulous management of funding costs to augment revenue streams, proficient expense oversight, and a sustained emphasis on asset quality.

A standout achievement during this quarter was observed in the bank's lending activities. Through a strategy focused on quality expansion, TMBThanachart concentrated on customer segments that harmonized with its core competencies and proficiency, enabling a deep understanding of customer requirements and risk profiles. The bank's pursuit of Ecosystem play initiatives aimed at servicing car owners, homeowners, and salaried individuals resulted in continued growth momentum across targeted sectors, including increments of 4% in cash your car, 3% in cash your home, and 4% in personal loans.

Notably, the Bank has maintained its commitment to providing comprehensive financial assistance to all customer segments through a range of programs, including loan restructuring and debt consolidation, aimed at alleviating the interest burden and fostering sustainable liquidity improvement. Presently, the Bank extends support through debt-restructuring initiatives, constituting approximately 11% of the total loan portfolio. Additionally, the Debt Consolidation Program has witnessed a rise in customer participation from around 17,000 individuals at the close of the previous year to 21,000 individuals, resulting in a collective reduction of approximately THB 1,400 million in interest payments.

Furthermore, the Bank has initiated a campaign titled "Phi-Chit-Nee (พิชิตหนี้)", with the objective of aiding indebted salaryman customers in resolving their debt challenges and ultimately achieving debt-free status. The Bank has set an ambitious target of assisting 200,000 Thai individuals within a span of three years. Such initiatives underscore our unwavering dedication to fulfilling the Bank's mission and aligning with the Bank of Thailand's directives on responsible lending practices.

Driven by prudent loan expansion, robust customer support mechanisms, and proactive non-performing loan (NPL) resolution efforts, the Bank has sustained favorable asset quality trends. The NPL ratio decreased from 2.62% at the conclusion of the previous year to 2.56% at the close of the first quarter. Concurrently, the NPL coverage ratio, indicative of the Bank's risk-absorption capacity, remained steadfast at a robust level of 155%.

Given the uncertain economic landscape, our steadfast commitment to a prudent business trajectory remains unwavering, ensuring the integrity of all balance sheet components. This approach has been the cornerstone of our strategy over recent years, yielding commendable outcomes in alignment with our enduring vision of fostering sustainable growth. The Bank's bolstered performance, sustained asset quality, and fortified financial standing post-merger and amid the challenges posed by the Covid-19 pandemic underscore the validity of our chosen business trajectory.

Key operational highlights for 1Q24 are detailed as follows:

As of March 24, loans amounted to THB 1,315 billion, reflecting a marginal 1.0% quarter-on-quarter slowdown. This trajectory harmonizes with our strategic emphasis on cultivating quality loan expansion and prudent repayment. Notably, target segments such as cash your home, cash your car, and personal loans continued to exhibit favorable trends.

Deposits stood at THB 1,373 billion, declining by 1.0% quarter-on-quarter, aligning with loan growth and our liquidity management strategy subsequent to a 4.3% quarter-on-quarter increase in deposit base in 4Q23, part of our preparation plan for 2024. The decrease primarily stemmed from commercial deposits, while target retail deposits, especially Time Deposit (TD), persisted in accordance with our projections. Our ample liquidity position affords us greater flexibility in managing funding costs in forthcoming quarters.

Revenue dynamics witnessed a shift in loan composition towards the retail segment and continued emphasis on funding cost optimization, bolstering overall operating performance despite challenges in fee income growth, notably mutual fund fees. Consequently, total operating income surged 4.7% year-on-year to THB 17,670 million in 1Q24. Operating expenses also experienced a 3.7% year-on-year increase, totaling THB 7,570 million.

The Bank maintains a harmonious balance between revenue and cost, evident in a cost-to-income ratio of 43%, consistent with our efficiency objectives, notwithstanding ongoing investments in digital capabilities.

Asset quality remains a focal point, demonstrating manageable trends as targeted. Gross NPLs amounted to THB 39,759 million, marking a 3.0% decline from 2023, translating to an NPL ratio of 2.56% compared to 2.62% at the close of 2023. Moreover, our investment portfolios predominantly comprise government bonds, with no inclination towards high-risk assets, shielding us from recent default incidents in the bond market.

In light of the aforementioned asset quality overview, provisioning for normal business operations aligned with expectations. Furthermore, we fortified our risk absorption buffer against economic uncertainties by earmarking additional provisions atop the standard level, culminating in a total provision of THB 5,117 million. Post-provision and tax, the Bank reported a net profit of THB 5,334 million in 1Q24, a notable improvement from THB 4,295 million in the preceding year.

Lastly, our capital position remains robust, with the Capital Adequacy Ratio (CAR) and Tier 1 standing at 20.8% and 17.0%, respectively, ranking among the industry's top tiers and substantially exceeding the Bank of Thailand's minimum requirements for Domestic Systemically Important Banks (D-SIBs) at 12.0% and 9.5%, respectively.

Piti concluded, "In addition to our quality growth strategy, we remain steadfast in prioritizing financial assistance to customers, in line with responsible lending principles and sustainable solutions to Thailand's household debt burden. Underpinning our mission to enhance Thais' Financial Well-being, our support transcends mere credit provision to encompass essential financial facets such as savings, investment, and comprehensive protection for customers at every life stage. We aspire to lead transformative change and effect tangible, sustainable improvements in Thais' Financial Well-being."