Siam Commercial Bank's profits to jump 27% to THB13.2b

Loans predicted to grow 2%.

According to Maybank Kim Eng, it anticipates that Siam Commercial Bank will post a profit of THB13.2b in 3Q13F, up 4% QoQ and 27% YoY, a new high. 

Here's more:

We expect loans to expand 2.0% QoQ (+8.9% YTD) with NIMs flat vis-à-vis last quarter. Fee income will see significant growth thanks to the CPALLMAKRO deal.

Non-NII income will keep expanding, driven by bancassurance, FX gains and Vayupuk dividends of THB270m. Costs have been well managed. NPLs are expected to remain unchanged from last quarter, so provisioning will still be at the normal level of 65bps.

Note that SCB may record additional profit from the reversal of some TAMC debt, which has not been finalised as yet. However, if SCB does decide to book this item, it will also need to set aside additional provisioning. 

2014F profit to rise 15% YoY. Although management believes the economy is slowing, SCB’s operations will still move ahead as planned.

SCB will focus on each business segment to maintain its no. 1 rank in the retail market and increase market share in the SME division. It will not focus on expanding its corporate banking business but rather on fee income growth. If 3Q13F earnings are in line with our estimates, SCB’s 9M13 earnings will make up 77% of our full-year projection.

We maintain our forecasts as we estimate that 4Q13F profit will drop slightly on an increase in expenses at year-end. We thus project a 25% and 15% YoYexpansion in 2013F and 2014F net profit respectively.