High Provision Drags KKP’s Net Profit in 2020 Down by 14% to Record at ฿5.1Bn

Kiatnakin Phatra Bank Public Company Limited (KKP) has announced its yearly consolidated financial statement of 2020 through the Stock Exchange of Thailand as follows;

KKP reported a net profit of 5,123 million baht in 2020, decreased 14.45% form a net profit of 5,988 million baht in 2019. The decrease was mainly from the increase in provisions as a result of the continued uncertainties from the economic slowdown as impacted by COVID-19.

 

Net interest income amounted to 14,679 million baht, an increase of 2,363 million baht or 19.2% YoY from 12,316 million baht in 2019. Interest income was 19,584 million baht, an increase of 8.6% YoY, mainly from the increase in interest income on loans and interest income on hire purchase and financial lease income from loan expansions and partly from the change due to TFRS 9 interest income calculation based on effective interest method effective from 2020 onwards. Yield on loan for 2020 increased slightly to 7.2% from 7.1% for 2019.

For 2020, non-interest income totaled 6,554 million baht, decreased by 4.3% YoY. The decline is mainly due to lower net fee and services income which amounted to 4,336 million baht, declining by 5.8% from 2019.

The  Non-Performing Loans (NPLs) to total loans ratio for 2020 declined further to 2.9% from 4.0% at the end of 2019 from asset quality management and also from growth in the loan portfolio.

 

For 2020, expected credit losses totaled Baht 4,095 million, an increase of 144.2%, compared to 1,676 million baht for 2019. Although, the situation surrounding COVID-19 has shown improvement during the second half of 2020 resulting in slight economic recovery during the second half of 2020.

However, with the deterioration of the COVID-19 situation at the end of 2020 and continuing into 2021, which could delay the pace of economic recovery and may result in deterioration of asset quality in the coming periods. The Bank continued to exercise cautionary measures under the TFRS 9 framework by setting aside higher provisions and management overlay to reflect possible deteriorations resulting from COVID-19 impacts. Total management overlay for 2020 amounted to 2,469 million baht.

Total allowance for expected credit losses to total NPLs ratio (coverage ratio) increased to 170.9% for 2020 from 111.2% for 2019. When excluding the release of excess loan loss reserve, provisions including loss from sale of repossessed cars (credit cost) for 2020 amounted to 2.55% of average loan, compared to 1.36% during 2019.