Siam Commercial Bank's NPLs fell by only US$113m in 4Q16

NPLs among SMEs increased in 4Q16.

While earnings were solid, as expected, thanks to a 72% QoQ decline in provision expenses, NPLs did not fall as much as we forecast. Gross NPL fell by only THB4b (US$113m)  because the bank reclassified the THB10b bad debt of Sahaviriya Steel Industries.

The bank said that there was an increase in NPLs among SME clients during the period. We are quite surprised to hear of this as this phenomenon happened only at SCB. We will watch the situation closely and ask the bank for more information regarding this unexpected development.