Tisco looks to best performance in 4 years
TISCO FINANCIAL Group is positive that its profit will be the best in four years thanks to the encouraging trends for fee income and non-performing loans.
Since demand for vehicles had overheated due to the short-lived first car scheme, Tisco’s profit growth had stalled.
Chief Oranuch Apisaksirikul believes that the new cycle of car sales will come in two years.
Since the first car scheme ended in 2012-13, and owners tend to change cars every four to five years, the next buying wave will be seen in 2018.
Lending this quarter should be flat due to the continuing slump in car sales, but asset quality is better than last quarter.
However, Tisco’s NPL ratio has still not decreased because the growth of new car loans has yet to come.
Fee income is key to its earnings this year. The group has seen good momentum in mutual fund and insurance premiums.
Tisco is a major player in trigger funds, and several funds that it launched had triggered before the due date, giving investors more confidence in buying its funds.
“Since I’ve been CEO, over the past six years, fee income gradually improved from Bt2 billion to Bt6 billion at present.
“Fee income growth this year will still be targeted at 5-10 per cent,” she said.
The lower cost of funds has also supported its net interest margin this year.
Tisco is one of the three lenders to Sahaviriya Steel Industries (SSI), which is now under rehabilitation.
However, creditors have eased their worries over SSI because SSI has lower operating costs from the reduction of anti-dumping from China. The lower cost helps fatten SSI’s profit margin.
If SSI’s mothballed steel plant in the UK can be sold and SSI can use the proceeds to pay off its debts, Tisco plans to take advantage of this gain by boosting its loan-loss reserves to ensure a high coverage ratio.
