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TMB cuts down NPLs to improve profitability

TMB cuts down NPLs to improve profitability

(16 January 2013 – Thailand) Thailand’s TMB Bank has slashed its non-performing loans (NPLs) to focus on return on equity and sustainable profitability. The NPLs have been reduced to nearly the level of the overall banking industry.

TMB Bank Chief Executive Boontuck Wungcharoen, said: 'We were able to set extra provisions of Bt5.28 billion (A$16.6 million) from selling Bt5.67 billion worth of NPLs in 2012 to make sure the coverage ratio and NPL ratio would not be problems for profitability.'

The bank reduced the NPL ratio to 4.1 percent at the end of last year from 5.44 percent on 30 September.

In the past five years, under its five-year plan, TMB Bank managed to shave NPLs by 16 percent, with 5 percent achieved in 2011 and 3.75 percent in 2012.

TMB saw rises of 20 percent in interest income, 25 percent in fee income, 9.7 percent in deposits and 17 percent in loans, which beat the lending target of 15 percent.

Its net interest margin improved to 2.7 percent from 2.4 percent thanks to the low cost of funds from savings products and high-yield assets such as loans to small and medium-sized enterprises.
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