(Adds comments from bank and executive)
BANGKOK, Jan 17 (Reuters) - Thailand’s second-largest lender, Siam Commercial Bank Pcl (SCB), reported a 7.1 percent fall in full-year profit on Thursday, citing lower non-interest income from its fee waiver and insurance business.
Earnings of 40.1 billion baht ($1.3 billion) were pressured by higher expenses from its transformation programme and missed expectations of 43.1 billion baht, based on a Refinitiv poll of 20 analysts.
“Despite a slight decline in earnings, our core business remains strong while our digital customer base has become significantly larger,” SCB’s chief executive, Arthid Nanthawithaya, said in a statement.
SCB said the benefits of its transformation programme would be seen in 2019 and that digital customer numbers reached 9 million in 2018, with a goal of 12 million by the end of 2019.
Higher expenses associated with the programme were temporary, and the cost-to-income ratio, which was 46.8 percent, would improve over time, Arthid said.
Loans grew 5.2 percent year-on-year and the bank is targetting loan growth of 5-7 percent for 2019, with a portfolio that is shifting to unsecured products and digital lending.
Non interest income was down 4.7 percent from a year earlier, also due to lower fee income from international trade, the bank said in a statement.
The announcement comes as growth in Southeast Asia’s second largest economy slows. The World Bank on Wednesday trimmed Thai growth projections to 3.8 percent from a previous estimate of 3.9 percent due to a global slow down and heightened trade tensions between China and the United States.
$1 = 31.7300 baht Reporting by Chayut Setboonsarng; Editing by Jason Neely and Mark Potter