TMBThanachart Bank Public Company Limited or TMBThanachart (ttb) announced its financial performance for the 4th quarter and the 12-month period of 2023 (4Q23 and 12M23). Net profit was reported at THB 4,866 million for 4Q23 and THB 18,462 million for 12M23. Overall, operating performance was in line with the Bank’s target and still focusing on improving asset quality and strengthening financial positions.
Piti Tantakasem, CEO of TMBThanachart, mentioned Overall operating performance in 2023 came out as targeted and in line with business plan to execute merger synergy realization which helped support revenue generation and operating cost management. The Bank also continued to strengthen all dimensions of financial position especially risk absorption capability, liquidity, and capital adequacy as these were our key targets.
To achieve such targets, the Bank’s strategic focus in 2023 was mainly on balance sheet management to ensure quality of all balance sheet components. For loan strategy in particular, the Bank continued to remain prudent in growing new loans and focusing on areas that are aligned with the Bank’s core strength and expertise.
As one of our priorities, TTB has continued to assist and provide financial supports to customers, especially in the vulnerable group. We also have promoted debt consolidation program to help ease customers’ interest burden and liquidity issues under this interest rate uptrend.
In 2023, the Bank provided ongoing supports to customers since Covid-19 debt relief program, accounting for 11% of total loans outstanding. In addition, the Bank successfully engaged approx. 17,000 customers in the debt consolidation program and helped reduce their interest payment by approx. THB 1.2 billion.
As a result, the Bank’s loan portfolio remained healthy and together with proactive NPL resolution, overall asset quality situation was under control. This can be reflected by NPL ratio which decreased from the peak level during Covid-19 at 2.98% to 2.62% at the end of 2023.
Nonetheless, given our expectation on uncertain economic prospect, TTB set aside special provision of THB 4.9 billion in the fourth quarter to uplift coverage ratio to 155%, compared to 138% in 2022 and 120% before merger. The current LLR level reflected our continuous improvement in risk absorption capability.
Furthermore, the Bank resumed deposit growth in 4Q23 to ensure liquidity readiness for business plan and potential deposit competition in 2024. As a result, Liquidity Coverage Ratio (LCR) rose solidly from 175% to 199%, compared to the Bank of Thailand’s minimum requirement of 100%.
On the capital aspect, the Bank’s capital position remained robust and stable. CAR and Tier 1 ratios stood at 20.7% and 17.0% at the end of 2023. These figures were among the top tiers in banking industry and well above the Bank of Thailand’s minimum requirement for D-SIBs banks at 12.0% and 9.5%, respectively.
All the financial figures reflected a stronger financial position of the Bank. In other words, it reflected the Bank’s solid cushion to absorb downside risks impacts, either on asset quality, liquidity, or capital aspects. Such a safeguard would help mitigate undesirable consequences and keep the Bank on track with business plan. On top of that, it enhanced the ability to provide financial supports to customers and maintain dividend stream, sustaining the shareholders’ value of the Bank.
Key 2023 operating results were as follows.
Loans, as of Dec-23, was at THB 1,328 billion which declined by 2.5% QoQ and 3.5% from the end of 2022 (YTD) was in line with a strategic direction to selectively grow loans and to shift portfolio mix towards retail segment. As a result, retail loans grew 2.1% YTD, led by target lending products namely Cash Your Home, Cash Your Car, Personal Loans and Credit Cards. Commercial Loans, on the other hand, declined by 11.6% YTD, due to customers’ loan repayments together with the Bank’s strategy to enhance liquidity utilization by recycling excess liquidity released from commercial segment to grow retail loan book.
Deposit stood at THB 1,387 billion which increased by 4.3% QoQ as per our plan to increase liquidity but slightly decreased from previous year by 0.9%, still in line with loan-deposit volume alignment plan. Overall,
key products could grow on track, led by time deposit, a high interest rate saving and ttb all free, a product offering transaction fee benefit and free accident protection.
On the revenue side, synergy realization remained one of supportive factors to revenue generation. The balance sheet synergy was driven by the shift in loan mix towards retail segment and growing penetration to consumer loan space. The revenue synergy would be coming from our new financial solution offerings
to our larger customer base from post-merger. With these drivers, total operating income rose to THB 70,961 million in 2023 from THB 65,852 million in 2022.
Total operating expenses was reported at THB 31,280 million in 2023 which increased from THB 29,952 million in 2022. The increase was aligned with business volume growth as well as the Bank’s human resource and digital investment plan. Thanks to cost efficiency, the Bank could keep costs in control as reflected by cost to income ratio decreasing to 43.6% from 45.1% in the previous year.
To further uplift the financial strengths, TTB set aside special provision in addition to the normal level. In total, provision expense was recorded at THB 22,199 million. After provision and taxes, the Bank reported 2023 net profit of THB 18,462 million, compared to THB 14,195 million in the previous year.
Mr. Piti concluded that “2023 financial deliverables have firmly set TTB’s ability and readiness for 2024. We will continue to generate quality growth to shareholders. Besides, with our aspiration to create better financial well-being for customers, we have shared the same direction with the policymakers and fully support the country’s household debt resolution plan and responsible lending concept.”
