During the year of 2014, Thailand’s economy recovered more slowly than expected due to low export growth in line with the state of the global economy – especially the slowdown in the economies of trading partners such as Europe, China and Japan – and to lower-than-expected government spending. Thailand also faced political problems during the first half of the year and household debt levels remained high. As a result, businesses scaled back their investment and households reduced their spending, and these negative factors impacted on loan demand from the Bank. For the year ending December 2014, total lending was Baht 1,782.2 billion, an increase of Baht 29.6 billion or 1.7 percent from the end of December 2013.
However, loan demand improved in the fourth quarter, rising by 2.3 percent from the third quarter of 2014, the highest increase in the past four quarters. Fourth-quarter growth was spurred by every customer segment – Corporate, SME, Consumer and International.
Loan quality remained good – at the end of December 2014, non-performing loans (NPLs) were Baht 45.0 billion, a decrease of Baht 1.1 billion from the end of September 2014, while the ratio of non-performing loans to total loans was 2.1 percent, compared to 2.3 percent at the end of September 2014. The ratio of loan loss reserves to NPLs rose to 204.1 percent and the ratio of loan loss reserves to total loans was 5.2 percent.
To ensure adequate liquidity to meet the financing needs of its customers in a cost-effective manner, the Bank increased its deposits throughout the year. As a result, at the end of December 2014, total deposits were Baht 2,058.8 billion, an increase of Baht 123.5 billion or 6.4 percent from the end of 2013. The loan-to-deposit ratio stood at 86.6 percent, a decrease from 90.6 percent at the end of December 2013. The net interest margin for the year was 2.37 percent, at a similar level to 2013.
In 2014, the Bank’s total income was Baht 96.9 billion, an increase of 5.9 percent from the previous year. Net interest income was Baht 59.0 billion, an increase of 5.6 percent. Non-interest income was Baht 37.9 billion, an increase of Baht 2.3 billion or 6.4 percent from 2013, due predominantly to increases in net fees and service income, gains on investment and dividend income.
The Bank’s operating expenses were Baht 43.1 billion, an increase of Baht 5.1 billion or 13.5 percent from 2013, due to investment to increase the Bank’s competitiveness such as improving operating efficiency and personnel.
In terms of capital, after the inclusion of net profit for the six months ending December 31, 2014, total capital adequacy ratio, common equity Tier 1 ratio and Tier 1 capital ratio of the Bank and its subsidiaries would be approximately 18.3 percent, 16.0 percent and 16.0 percent, respectively.
Shareholders’ equity as of December 31, 2014 amounted to Baht 323.5 billion, equivalent to 11.7 percent of total assets. The book value per share was Baht 169.47, an increase of Baht 14.44 from the end of 2013.