KBANK Announces 104% Increase in 1H21 Earnings to ฿19.5Bn

Ms. Kattiya Indaravijaya, Chief Executive Officer of Kasikornbank Public Company Limited (KBANK), said the Thai economy in the second quarter of 2021 was affected by a third wave of the domestic COVID-19 outbreak that weighed upon household and business spending and delayed the recovery path of the tourism sector.

Although government relief measures and strong export performance helped support the economy, the Thai economic outlook for the rest of the year will depend on the rollout of vaccines, the course of the COVID-19 pandemic, and related control measures.

Operating performance for the first half of 2021, KBANK and its subsidiaries reported net profit of Baht 19,521 Million, and reported net profit of Baht 8,894 Million, for the second quarter of 2021.

 

Operating performance for the first half of 2021 compared with the first half of 2020

KBANK and its subsidiaries reported net profit of Baht 19,521 Million, an increase of Baht 9,971 Million or 104.40% over the same period of 2020, due to KBANK and its subsidiaries set aside lower expected credit loss from the preceding period by 39.32%.

For the first half of 2020, KBANK and its subsidiaries set aside high level of expected credit loss amounting to Baht 32,064 Million under prudent approach to support uncertainties from the COVID-19 pandemic that has never happened before together with potential effect from measures of the government and competent agencies urging financial institutions to provide assistance to customers that the Bank has closely monitored asset quality.

Although the Thai economy in the first half of 2021 was affected by the new spread of COVID-19 pandemic, KBANK and its subsidiaries closely assess and prepare to support uncertainties of economic contraction and delay of recovery and still continuously support customers through various measures comprising loans to bolster liquidity for customers.

Thus, KBANK and its subsidiaries consider to set aside expected credit loss in the first half of 2021 amounting to Baht 19,457 Million, which consistently conform with prudent approach. In comparison to the previous quarter, the expected credit loss increased by 24.93%.

 

Operating profit before expected credit loss and income tax expense for the first half of 2021 of Baht 47,282 Million increased by Baht 1,332 Million or 2.90% over the same period of 2020. Net interest income increased by Baht 2,686 Million or 4.87% from continual growth of lending, a 6.17% growth over last year from the customers with potential.

The Bank has closely monitored asset quality in order to provide ongoing assistance to customers along with loans interest rate cut. However, there are still some customers under the Bank’s relief measures covering moratorium on principal and interest payments that the Bank has to manage increasing accrued interest so that the customers and the Bank could resume normal business operations.

Moreover, interest expenses from deposits from customers declined as a result of lower average interest rate, resulting in NIM that stood at 3.20%, while non – interest income decreased by Baht 1,031 Million or 4.28%, mainly due to the mark to market of financial assets according to market condition and decrease in net premiums earned – net.

Although fees and service income – net increased by Baht 1,110 Million or 6.57%, mainly due to fees from fund management and brokerage fees. Other operating expenses slightly increased by Baht 323 Million or 0.97% due to expense management during the economic slowdown. Cost to income ratio stood at 41.54%.

 

Operating performance for the second quarter of 2021 compared with the first quarter of 2021

KBANK and its subsidiaries reported operating profit before expected credit loss and income tax expense of Baht 23,786 Million, an increase of Baht 290 Million or 1.23% over the previous quarter. KBANK and its subsidiaries set aside higher of expected credit loss by Baht 2,157 Million or 24.93% from the previous quarter, resulting in net profit for the second quarter of 2021 amounting to Baht 19,457 Million, which consistently conform with prudent approach. In comparison to the previous quarter, the expected credit loss increased by 24.93%.

As of 30 June 2021, KBANK and its subsidiaries’ total assets were Baht 3,886,863 Million, an increase of Baht 228,065 Million or 6.23% over the end of 2020. The majority came from loans growth and an increase in investments – net.

As of 30 June 2021, NPL gross to total loans stood at 3.95%, while at the end of 2020 this stood at 3.93%. The Bank has closely monitored and assured credit quality for customers affected by COVID-19.

Coverage ratio as of 30 June 2021 stood at 154.09%, while at the end of 2020 this stood at 149.19%. In addition, as of 30 June 2021, KASIKORNBANK FINANCIAL CONGLOMERATE’s Capital Adequacy Ratio (CAR) according to the Basel III Accord was 18.19%, with a Tier-1 Capital ratio of 15.86%.