KBANK’s 2020 Earnings Drop Nearly 24% after Setting High Provision amid Covid-19 Outbreak

Kasikornbank Public Company Limited (KBANK) has announced its yearly consolidated financial statement of 2020 through the Stock Exchange of Thailand as follows;

In 2020, KBANK reported a net profit of 29,487 million baht, decreased 23.86% when compared to a net profit of 38,726 million baht. The decrease was mainly due to the fact that KBANK complied with a continuous prudent approach to set aside higher expected credit loss, which had been reserved since the first half of 2020 amounting to 32,064 million baht due to high uncertainty from the COVID-19 pandemic.

 

Net interest income in 2020 was 109,022 million baht, increased 6.17% from a year before, mainly due to a decrease in interest income and interest expenses. Non-interest income amounting to 45,869 million baht, a decrease of 11,934 million baht or 20.65%, mainly due to decreases in revenue from the sale of securities and fees income related to the loan which change to reflect in interest income.

 

As of 31 December 2020, NPL gross to total loans stood at 3.93%. The Bank has provided support and assured credit quality for customers affected by COVID-19, while at the end of 2019 this stood at 3.65%. The coverage ratio as of 31 December 2020 stood at 149.19%, while at the end of 2019 this stood at 148.60%.

 

Totally, KBANK set aside expected credit loss amounting to 43,548 million baht for the year of 2020, in the level that could cover potential damages occurred suitably and in line with the situation. Even though net interest income increased by 6,334 million baht or 6.17%, mainly due to a decrease in interest expenses as a result of a decrease in an average interest rate and a decrease in contributions to Financial Institutions Development Fund (FIDF), resulting in NIM that stood at 3.27%.