Siam Commercial Bank's gross NPLs up 3.6% in Q1

NPL ratio now stands at 3.06%.

Siam Commercial Bank's (SCB) gross NPLs in 1Q17 slightly rose by 3.6%, pushing the NPL ratio to up 10bps to 3.06%, notes Maybank Kim Eng. The bank said that the source of NPLs was still concentrated in SME-related loans.

"We note that special-mention loans (1-3 month past due) fell by 2%, suggesting that NPLs should not escalate in the period ahead. The increase in NPLs forced SCB to increase the provisioning expenses to a normal level (THB5.0b (US$145m) or equivalent to 1.03% of credit cost), after it fell to an extraordinarily low level of THB2.0b in 4Q16. Toplines recovered in 1Q17 at a slower pace than expected, especially loan growth, which rose only 0.7% QoQ. But we expect that stronger economic growth in 2H17 should drive the loan growth to our FY17 target of 7%," adds Maybank Kim Eng.