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Asia300

Top Thai banks boost profit 3% in 2016

But outlook remains dim on concerns of slow export recovery

BANGKOK -- Net profit at Thailand's five biggest banks climbed 3% to 173.28 billion baht ($4.92 billion) in 2016, recovering from a slump a year earlier.

However, the banks are releasing conservative estimates for this fiscal year, concerned about global economic uncertainties that may hurt Thai exports.

Bangkok Bank, Thailand's largest by asset size, was the only major bank to post a net profit drop, as it was hurt by the country's slow economic recovery. The bank's profit fell 7% to 31.8 billion baht. The fourth-ranked Kasikornbank, which lends primarily to small and midsize businesses, reported a 32% rise in the value of nonperforming loans, worsening the most of the five. It's net profit rose 1.8% to 40.1 billion baht.

Meanwhile, Bank of Ayudhya, a unit of Bank of Tokyo-Mitsubishi UFJ, posted double-digit profit growth and hit a record high of 21.4 billion baht. It appears to have benefited from government policies such as housing loan support. Compared to the other major banks, Thailand's fifth-largest bank extends more loans to retail customers.

Because of reasons such as a slow recovery in exports, "nonperforming loans will increase through the second quarter," said Payong Srivanich, president of the second-largest Krung Thai Bank.

"Although the economy is recovering, it will not happen quickly," Arthid Nanthawithaya, president of third-ranked Siam Commercial Bank, said. The bank expects an around 4-6% growth rate for loans, roughly the same as the previous year.

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