TMBThanachart reported the net profit of THB 5,230 million for the third quarter of 2024 and THB 15,919 million for the nine-month period. Asset quality remained under control with a low NPL ratio at 2.7%. As one of its priorities, the Bank continues to support customers, in line with the directions of household debt resolution and responsible lending as well as launching "Tang-Lak program", a measure to support flood-affected customers.
TMBThanachart Bank Public Company Limited, or TMBThanachart (ttb), announced its financial performance for the third quarter and the nine-month period of 2024 (3Q24 and 9M24). Overall, the Bank and its subsidiaries' deliverables were on track. Net profit was reported at THB 5,230 million in 3Q24, driven mainly by efficient cost and revenue alignment together with a lower provision from the previous quarter on the backdrop of a manageable asset quality. As a result, 9M24 net profit was at THB 15,919 million.
Mr. Piti Tantakasem, CEO of TMBThanachart, mentioned, Economic conditions in the third quarter remained challenging, posing pressure on both revenue generation and asset quality, unchanged from the first half of the year. As such, the Bank continued to focus on cost and revenue alignment, as well as prudently manage asset quality to control risk cost and keep NPL ratio at low level. In addition, the Bank launched "Tang-Lak program", as an immediate support to flood-affected customers, covering both SME and retail lending customers.
In terms of 3Q24 performance, the financial results remained on track, supported by efficient cost management in three main areas, which are funding cost, operating cost, and risk cost or provision expense.
For funding cost, the Bank has emphasized on effective asset-liability management. Our initiatives include an optimization of loan structure, a deposit-loan volume alignment and the adjustment of investment strategy to handle with market fluctuation and enhance investment returns in response to interest rate trend in money market.
For operating cost, the Bank has consistently maintained cost discipline and ensured that spending would be aligned with our strategies to enhance customer experience. In addition, the Bank continues to improve and develop new digital capabilities for mobile-banking application to escalate digital transactions which would help improve cost-to-serve structure. With such efforts, the Bank could manage operating cost in line with target.
In terms of risk cost management, the Bank has prudently grown loans by leveraging our Ecosystem Play initiatives, together with our expertise and leading market positions to acquire quality loans focusing on home owners, car owners, and salaryman. Moreover, the Bank has monitored customers closely to provide appropriate financial support through various loan-modification schemes. Together with proactive NPL management, overall asset quality situation has been manageable and hence the Bank could control risk cost as planned.
As one of its priorities, the Bank has continued to provide support to customers in line with the direction of responsible lending and household debt resolution. Our ongoing supports include Debt Consolidation program as TTB aims to help customers improve their liquidity sustainably. Currently, the number of customers participated in the Debt Consolidation program has risen to 31,000 persons from 17,000 persons at the end of last year, which could translate into a reduction in interest burdens by approximately THB 1,900 million.
Details of 3Q24 and 9M24 key operating performance are as follows:
As of 3Q24, total loans amounted to THB 1,253 billion, a 5.7% decline from the end of 2023 (YTD), in line with the prudent loan growth direction while targeted products continued to grow, particularly cash-your-home (+10% YTD), cash-your-car (+6% YTD) and personal loans (+9% YTD). The decrease in outstanding loans was primarily a result of loan repayments from large corporate, a slowdown in hire purchase loans due to a weak auto market and a proactive asset quality management through sales and write-off activities which led to a 2% YTD decrease in NPLs.
Deposit stood at THB 1,296 billion, a 6.5% decrease YTD, in line with liquidity management to align deposit growth with a slow loan demand. Key factor was mainly a decrease in high-cost deposit, while retail deposit continued to grow as planned such as ttb all free which offers transactional benefits and accident insurance. Despite such a decline, the Bank's liquidity remained high as reflected by the loan-to-deposit ratio (LDR) of 97%. This was because the Bank had expanded deposits by 4.3% in 4Q23 as a preparation for 2024 operation, providing the Bank a flexibility in managing funding cost.
In 3Q24 the Bank reported THB 17,225 million of total operating income and THB 7,295 million of operating expenses. As a result, 9M24 operating income came in at THB 52,266 million, relatively stable YoY. Operating expenses was at THB 22,075 million, a decrease of 3.8% YoY, reflecting the effective cost management.
In terms of NPL management, the Bank has focused on effective NPL resolution through sales and write-off activities. With that, NPLs as of Sep-24 reduced by 2% YTD to THB 40,224 million, representing a relatively low NPL ratio of 2.7%. Meanwhile, the NPL coverage ratio remained high at 149%, in line with target.
As asset quality was in control, provision was at THB 4,764 million in 3Q24 or declined by 10% QoQ. For 9M24, provision totaled THB 15,162 million, still higher than 9M23 as the Bank has set extra provision for Management Overlay since the beginning of the year. This was an additional cushion to a normal business level (Normal Provision) to strengthen buffer against economic uncertainties. After provision and tax, the Bank reported net profit for 3Q24 and 9M24 of THB 5,230 million and THB 15,919 million, respectively.
Lastly, capital position remained robust. As of 3Q24, CAR was at 19.7% and Tier 1 ratio was at 17.3%, an increase QoQ. Overall, the capital figures remain one of the top tiers in the banking industry and well above the Bank of Thailand's minimum requirement for D-SIBs at 12.0% for CAR and 9.5% for Tier 1.
Mr. Piti concluded, "For the rest of the year, the Bank will maintain its prudent business direction on the backdrop of uncertain macro-outlook. However, with healthy financial fundamentals, ttb is in a strong position to withstand with economic headwinds. We will continue to provide customer supports in line with the direction of responsible lending and household debt resolution and pursue commitment to all stakeholders."