Siam Commercial Bank's net interest income slipped 3.6% in 3Q15

Blame it on the weak NIM.

According to Maybank Kim Eng, even though the 3Q earnings results were slightly weaker than expected (5% and 8% lower than our and market expectation), it was mostly in line with management’s guidance. Loans were virtually flat, but the weak NIM led to a 3.6% QoQ fall in net interest income.

Here's more from Maybank Kim Eng:

Non-interest income surged 54% QoQ largely due to the THB8.3b of gains from asset sales. Excluding the extra items, non-interest income contracted by 10% QoQ due to the weakness in trading income. Operating profit, pre-provisions rose 27% QoQ, while operating expenses edged up 1.3%.

As anticipated, SCB set aside THB16b of provisions this quarter, equivalent to 3.53% of its annualized credit cost. The bank also did write-off the SSI UK’s debt, but left off the SSI Thailand’s loans in the balance sheet.

And because of SSI Thailand’s NPL reclassification, NPLs surged to 3.43%, pushing down the coverage ratio from 138% to 101%. Finally, net profit softened to THB9.0b.