TISCO Reports a Slight Drop on Net Income from Lower NII and Accelerating ECL

Tisco Financial Group Public Company Limited (SET: TISCO) has announced its 1Q24 consolidated financial statement through the Stock Exchange of Thailand as follows;

Year 1Q24 1Q23
Net Profit (Loss)
Million Baht
1,733.02 1,792.58
Earning Per Share
2.1600 2.2400
% Change -3.32

TISCO reported a net profit of 1,733 million baht in 1Q24 decreased 3.32% from a net profit of 1,792 million baht in 1Q23. The decrease was mainly due to a slowdown in non-interest income and higher expected credit loss (ECL).

Total operating income increased by 2.1% (YoY) thanks to a growth in net interest income of 5.4% following portfolio expansion. However, non-interest income weakened by 5.5% (YoY), contributed by a weak recovery in brokerage business amid subdued capital market conditions, coupled with a decline in banking fee aligning with lower new business volume.

Expected credit loss (ECL) was reported at 279.04 million baht, increased compared to 91.07 million baht in the same period of last year, and accounted for 0.5% of average loans. The increase in ECL expense was in accordance with the provision policy to reflect the rising consumer credit risk arising from the growth into high-yield businesses and fragile economic factors. Non-performing loans (NPLs) increased from the endof last year to 2.27%, and loan  loss coverage ratio declined to 177.8%.

Compared to the fourth quarter of 2023, net profit decreased by 47.14 million baht or 2.6% (QoQ), mainly caused by a continuing increase in cost of funds which resulted in declining net interest income by 3.0% (QoQ), together with an increase in ECL expenses. Non-interest income increased by 3.8% (QoQ), mainly due to a record of gain on financial instruments measured at fair value through profit or loss (FVTPL) and dividend income. However, non-interest income from core businesses softened by 5.1% (QoQ), mainly derived from weak banking fees following lower new business volume.

Total loans and receivables as of March 31, 2024 totaled 235,217.77 million baht, grew by 0.2% (QoQ), primarily contributed by the growth in corporate loans and commercial loans.

Yield on loans increased from 7.24% to 7.63% (YoY) in relation to the increased proportion of high-yield loans and the adjustment of floating interest rates. The cost of funds rose from 1.63% to 2.39% (YoY) owing to a continuing increase in funding cost following deposit rate repricing. Therefore, loan spread declined from 5.62% to 5.24% (YoY), and net interest margin (NIM) decreased from 4.88% to 4.76% (YoY).