KBANK Reports a 32% Drop in 3Q Profit after Recording ฿10.8Bn ECL!

Kasikornbank Public Company Limited (KBANK) has reported its 3Q20 consolidated financial statement through the Stock Exchange of Thailand as follows;

KBANK recorded a net profit of 6,678 million baht in 3Q20, decreased 32.89% compared to a net profit of 9,951 million baht in 3Q19. In 3Q20, fees and service income dropped by 17.45% from 9,456 million baht in 3Q19 to 7,805 million baht in 3Q20. Meanwhile, the bank set aside expected credit loss at the amount of 10,814 million baht for the third quarter of 2020 was the main reason for its lower net profit compared to none in 3Q19.

 

However, the profit for the quarter increased by 4,504 million baht or 207.01% from the preceding quarter. Net interest income increased by 173 million baht or 0.64% mainly due to a decrease in interest income from loans to customers and interest expenses from deposits from customers, resulting in NIM that stood at 3.17%, while non – interest income decreased by 4,593 million baht or 32.60% mainly due to mark to market of investments according to market condition. Other operating expenses increased by 651 million baht or 4.12% mainly due to estimated employee expenses, resulting in the cost to income ratio that stood at 44.75% in this quarter.

Moreover, KBANK set aside lower expected credit loss by 9,377 million baht or 46.44%, mainly due to in the preceding quarter KBANK set aside high level of expected credit loss from assessment and preparation complying continuous prudent approach to support uncertainties of economic contraction from the COVID-19 pandemic together with government and institution measures to support customers affected by COVID-19.

As of 30 September 2020, NPL gross to total loans stood at 3.95%, while at the end of 2019 this stood at 3.65%.

 

KBANK stated that the bank has closely monitored, provided support and assured credit quality for customers affected by COVID-19. Coverage ratio as of 30 September 2020 stood at 161.12%, while at the end of 2019 this stood at 148.60%. In addition, as of 30 September 2020, KASIKORNBANK FINANCIAL CONGLOMERATE’s Capital Adequacy Ratio (CAR) according to the Basel III Accord was 18.45%, with a Tier-1 Capital ratio of 15.74%.