Siam Commercial Bank (SCB) has given assurances that its strong capital buffer with a capital adequacy ratio (CAR) of 17.8% is sufficient to handle rising bad loans.
The bank's board meeting recently approved the allocation of profit after dividend payments for the second half were made, bringing its CAR to 375 billion baht accounting for 17.8% at the end of April, chief executive Arthid Nanthawithaya said at yesterday's shareholder meeting.
Of the total CAR, Tier 1 capital was 352.01 billion baht or 16.71%, he said.
The bank believes that the solid capital base is enough to cope with higher non-performing loans amid the pandemic.
SCB also set aside additional reserves for loan loss in the first quarter of the year in preparation for a fragile economy.
Given the central bank's debt relief scheme, SCB is confident it can keep a lid on bad loans.
"We cannot forecast NPLs for this year, as we must wait for a clearer economic picture after the government eased the lockdown measures, which will revitalise economic activity," Mr Arthid said.
He said the bank will focus on helping customers overcome the coronavirus crisis. Both individual and commercial clients are battered by the government's containment measures, and the tourism and export sectors have borne the brunt.
The bank expects the easing lockdown to gradually improve the situation for virus-hit customers.
SCB, the country's fourth-largest lender by assets, is prepared to miss some financial targets for 2020, particularly for loan and income growth and NPLs.
Meanwhile, SCB co-president Sarut Rattanaporn said the bank is ready to offer an additional credit line to loss-ridden Pace Development Corporation, whose business rehabilitation plan is scheduled to be submitted to the Central Bankruptcy Court by August.
SCB shares closed yesterday on the Stock Exchange of Thailand at 80.50 baht, up two baht, in trade worth 1.04 billion baht.