April 20, 2018 / 5:55 AM / 3 months ago

Thailand's top banks post faster quarterly profit growth, face fee income strains

* Kasikornbank’s Q1 profit up 5.8 pct, Bangkok Bank’s up 8.4 pct

* SCB’s profit falls 4.6 pct on rise in digital spending

* Banks waiving digital fees amid competition from non-bank players

BANGKOK, April 20 (Reuters) - Two of Thailand’s top banks posted a faster pace of quarterly profit growth as an expanding economy boosted demand for loans and financial services, but intensifying competition from non-bank players is set to put pressure on their results this year.

Kasikornbank Pcl, the country’s third largest lender, reported on Friday a 5.8 percent rise in net profit to 10.8 billion baht ($342.51 million) for the quarter ended March, a shade better than the average 10.6 billion baht expected by three analysts, according to Thomson Reuters data.

The profit increase was Kasikornbank’s fastest since the first quarter of 2017.

The bank attributed the gains to a 2.6 percent increase in interest income and a 4.7 percent rise in net fee and service income.

Top lender Bangkok Bank reported late on Thursday an 8.4 percent increase in first-quarter net profit to 9 billion baht. That was slightly better than the average 8.9 billion baht estimate of four analysts in a Reuters survey and was its fastest growth since the second quarter of 2017.

Bangkok Bank attributed the profit rise to a 32 percent jump in non-interest income driven by mutual funds and loan-related services.

Thailand’s economy, Southeast Asia’s second-largest, has benefitted from higher tourist arrivals and stronger exports, with the central bank raising in March its forecasts for economic growth and exports this year.

But Thai lenders are facing rising competition from the likes of payments firms and fintech companies, whose growth is being encouraged by the government through the provision of initiatives. That is leading to an increase in costs.

Siam Commercial Bank, the second-largest bank, reported on Thursday a 4.6 percent dip in first-quarter net profit, partly due to costs associated with investments in digital banking.

Thai banks announced in March they are waiving fees for digital transactions, a major source of their fee income, in a bid to retain customers.

Subsequently, Kasikornbank warned earlier this month that its non-interest income for 2018 would fall by 6 percent to 8 percent. ($1 = 31.2400 baht) (Reporting by Chayut Setboonsarng Editing by Muralikumar Anantharaman)

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