TMBThanachart Bank and its subsidiaries reports 2Q21 financial performance.


Bangkok, 20th July 2021 – TMBThanachart or TMBThanachart Bank Public Company Limited  announced today its 2Q21 financial performance. The Bank reported net profit of THB 2,534 million, down by 8.9% from 1Q21 as the resurgence of COVID-19 epidemic put more pressure on income generation. Nonetheless, synergy realization from the merger, cost efficiency and asset quality management were delivered as targets. The integration process was also completed as plan. For now, the immediate priorities are to provide COVID-19 financial assistance to customers for the better Financial Well-being and to further uplift health measures to ensure the safety of employees and branch customers, helping all to through this crisis together. 

Mr. Piti Tantakasem, CEO of TMBThanachart mentioned “Economic situation in the second quarter became increasingly challenging as COVID-19 outbreak in April 2021 was more severe than in 1Q21. For TMBThanachart, we had set our target to complete the integration process. With the well-planned integration roadmap and our dedicated staff, the Bank was successfully integrated on 5th July 2021 as per our 18-month plan, despite operational limitations arising from COVID-19. 

In terms of 2Q21 business operation, the Bank still focused on quality growth strategy rather than pushing for aggressive growth against economic headwinds as it could come with risks. The objective is to preserve and maintain strong financial position in order to regain growth momentum once situation allows. Although income generation was under pressured, other key targets were delivered as plan. The achieved areas were synergy value realization, mainly from the merger plan, cost efficiency and asset quality management. 

Under the severe and prolonged situation of the COVID-19 outbreak, the Bank’s immediate priorities are on our customers and employees. Currently, we put our best effort to support and provide financial assistance to affected customers as well as to uplift health measures to ensure the safety of our employees, especially the front-line branch staff and call center, including branch customers. 

As for the second-half outlook, COVID-19 situation is expected to weaken the economic environment further. Therefore, core strategy will be unchanged. The addition will be the execution of post-merger revenue synergy realization initiatives by enhancing service and products offerings to our customers.

In terms of expenses, there will be the remaining integration expenses to be recognized in the second half. There will also be additional expenses related to COVID-19 healthcare measures for the Bank’s employees. Therefore, cost to income ratio is likely to linger at the higher bound of the Bank’s guidance of 47%-49% range. 

For asset quality, we will continue to closely monitor our portfolio. The supporting measure from government sector and the Bank of Thailand is indeed a crucial vehicle that allows the Bank to provide better assistance to customers and to manage asset quality more efficiently. Since the first outbreak last year, the Bank accepted more than 750,000 customers into the debt relief program. Currently, loans under debt relief measures accounts for approximately 14% of total loan outstanding. 

Under the preemptive debt restructure, customers are able to resume their debt repayment as normal. This helps mitigate the pace of defaults and NPL formations. However, as NPL resolutions such as NPL sales are likely to be slower when compared to a normal business cycle, NPL outstanding and NPL ratio are expected to be on an uptrend. 

At the end of 2Q21, the Bank reported an NPL outstanding of THB 43,543 million, close to THB 43,400 million in the previous quarter. However, due to a slowdown in total loans, the ratio of NPL to total loans rose from 2.75% to 2.89% but still within target.” 

Details of 2Q21 financial performance are as follows. 

Loans to customers was at THB 1,359 billion, a decline by 2.5% from last year (YTD). The contraction in loans was due mainly to the Bank’s quality growth strategy together with loan repayment from large corporate segment. 

On the deposit side, the ending balance was at THB 1,324 billion, down by 3.6% YTD. One of the key reasons was because the Bank continued to optimize deposit structure by lowering time-deposit and replacing with ttb all free and ttb no-fixed, our flagship products which continue to grow. Another reason was the Bank’s liquidity management in response to a slow loan growth environment. 

From such a deposit strategy and liquidity management, the Bank could manage funding cost efficiently. Net Interest Margin (NIM) as a result stayed at 2.98%, relatively close to 3.00% in the previous quarter. Net Interest Income (NII) also came in at THB 12,782 million or declined only 0.7% QoQ despite interest rate downtrend. 

Non-Interest Income (Non-NII) was at THB 3,118 million or decreased 21.5% from 1Q21. Key factor was the decline in retail fee income, affected by COVID-19  in April 2021 wave that led to stricter COVID-19 measures and controls. On the other hand, commercial fees especially trade finance fees showed an improving sign from last year as import-export activities have recovered. 

Operating expense was at THB 7,402 million, down 6.6% QoQ and cost-to-income ratio came at 46.4%. The decrease in expenses was from cost synergy realization and execution of cost discipline. Besides, there were some marketing expenses related to integration activities that were halted and postponed to the second half due to COVID-19 situation. With that, cost-to-income ratio is likely to increase in the following quarters but still within target range. 

Pre-Provision Operating profit (PPOP) was reported at THB 8,502 million or dropped by 4.5% QoQ. The Bank still set aside elevated provision level of THB 5,491 million, fairly close to the previous quarter and reported net profit, of THB 2,534 million which declined 8.9% QoQ. 

Capital adequacy was among the top tier in Thai banking industry. At the end of 2Q21, the preliminary CAR and Tier 1 was reported at 19.6% and 15.5%. The figures were above the Bank of Thailand’s minimum requirement of 11.0% and 8.5%, respectively. 



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