Since 1 January 2020 the Bank and its subsidiaries initially adopted TFRS related to financial instruments (included TFRS 9) which affect to classification, measurement of financial assets and financial liabilities, impairment of financial assets and hedge accounting. The impact from first-time adoption are adjusted to retained earnings as of 1 January 2020. In addition, the financial statements are prepared in accordance with the Bank of Thailand notification which some items are not comparable with the financial statements and key financial ratio of previous period.
Operating performance for the first quarter of 2020, KBank and its subsidiaries reported net profit of Baht 6,581 Million, and reported net profit of Baht 10,044 Million, for the same period of 2019.
Operating performance for the first quarter of 2020 compared with the first quarter of 2019, KBank and its subsidiaries reported net profit of Baht 6,581 Million, a decrease of Baht 3,463 Million or 34.47% over the same period of 2019. Net interest income increased by Baht 2,830 Million or 11.21% mainly due to loan growth and TFRS 9 revenue recognition concept which interest income and fee income related to loan shall be calculated by using effective interest rate method, while previously calculated by contractual rate. In addition, Contributions to Financial Institutions Development Fund (FIDF) decreased due to the Bank of Thailand announcement. NIM stood at 3.49%. Non - interest income decreased by Baht 4,869 Million or 39.78% mainly due to the volatility of money market and capital market during the economic recession from COVID-19, and TFRS 9 impacts from reclassification and remeasurement of investments that reflect in non-interest income. However, other operating expenses increased by Baht 1,471 Million or 9.19% due to debt management expenses, IT related expenses and marketing expenses, resulting in the cost to income ratio that stood at 49.31%. KBank has set aside higher expected credit loss from the preceding period of Baht 4,292 Million, with prudent consideration on factors in line with uncertainties from continued economic slowdown.
Operating performance for the first quarter of 2020 compared with the fourth quarter of 2019, KBank and its subsidiaries reported net profit of Baht 6,581 Million, a decrease from the preceding quarter of Baht 2,221 Million or 25.23%. Net interest income increased by Baht 2,512 Million or 9.82% mainly due to loan growth and TFRS 9 revenue recognition concept of interest income and fee income related to loan. In addition, Contributions to Financial Institutions Development Fund (FIDF) decreased due to the Bank of Thailand announcement. NIM stood at 3.49%. Non - interest income decreased by Baht 8,785 Million or 54.37% mainly due to the volatility of money market and capital market during the economic recession from COVID-19, and TFRS 9 the impacts from reclassification and remeasurement that reflect in non-interest income, while net premiums earned - net increased. Other operating expenses decreased by Baht 3,695 Million or 17.45% due to seasonality, as well as branding campaigns and marketing activities in line with business direction of KBank in the fourth quarter of 2019, resulting in the cost to income ratio that stood at 49.31%. In addition, KBank has set aside higher expected credit loss from the preceding quarter of Baht 3,047 Million.
As of 31 March 2020, KBank and its subsidiaries’ total assets were Baht 3,483,527 Million, an increase of Baht 189,638 Million or 5.76% over the end of 2019. The majority came from an increase of interbank and money market items - net and loans. NPL gross to total loans as of 31 March 2020 stood at 3.86%, while at the end of 2019 this stood at 3.65%. The Bank has closely monitored, provided support and assure credit quality for customer affected by COVID-19. Coverage ratio as of 31 March 2020 stood at 138.66%, while at the end of 2019 this stood at 148.60%. In addition, as of 31 March 2020, KASIKORNBANK FINANCIAL CONGLOMERATE’s Capital Adequacy Ratio (CAR) according to the Basel III Accord was 18.53%, with a Tier-1 Capital ratio of 15.17%.