Since 1 January 2020 the Bank and its subsidiaries initially adopted TFRS related to financial instruments (included TFRS 9) which some items are not comparable with the financial statements and key financial ratios of previous period.
Operating performance for the year of 2020, KBank and its subsidiaries reported net profit of Baht 29,487 Million, and reported net profit of Baht 13,258 Million, for the fourth quarter of 2020.
KBank and its subsidiaries reported net profit for the year of 2020 of Baht 29,487 Million, a decrease of Baht 9,240 Million or 23.86% over the previous year, mainly due to the fact that KBank and its subsidiaries comply continuous prudent approach to set aside higher expected credit loss from the preceding year of Baht 9,536 Million or 28.04%, which had reserved since the first half of 2020 amounting to Baht 32,064 Million due to high uncertainty from the COVID-19 pandemic, severely impacted domestic and abroad that has never been happened before, together with measures of the government and competent agencies urging financial institutions to provide assistance to customers. However, although the relief measures gradually ended in the second half of 2020, the customers are still able to repay debts better than expected and the new wave of COVID-19 pandemic occurred in late fourth quarter, the Bank has revisited and assessed the adequacy of reserve and found that the reserve set aside in the past three quarters are sufficient. The Bank thus consider to set aside lower expected credit loss compared to the prior periods. Totally, the Bank set aside expected credit loss amounting to Baht 43,548 Million for the year of 2020, in the level that could cover potential damages occurred suitably and in line with situation.
Even though net interest income increased by Baht 6,334 Million or 6.17%, mainly due to a decrease in interest expenses as a result of a decrease in average interest rate and a decrease in contributions to Financial Institutions Development Fund (FIDF), resulting in NIM that stood at 3.27%. Non - interest income decreased by Baht 11,934 Million or 20.65%, mainly due to decreases in revenue from sale of securities and fees income related to loan which change to reflect in interest income. In addition, other operating expenses decreased by Baht 2,733 Million or 3.76%, mainly due to a decrease in estimated employee expenses and marketing expenses, while debt management expenses increased. Although in this quarter other operating expenses increased by Baht 3,825 Million or 23.26%, mainly due to increases in IT related expenses in order to support customers' needs, marketing expenses due to seasonality and activities collaborated with business partners, resulting in the cost to income ratio that stood at 45.19% in this year.
As of 31 December 2020, KBank and its subsidiaries' total assets were Baht 3,658,798 Million, an increase of Baht 364,909 Million or 11.08% over the end of 2019, which the majority came from loans. As of 31 December 2020, NPL gross to total loans stood at 3.93%. The Bank has provided support and assured credit quality for customer affected by COVID-19, while at the end of 2019 this stood at 3.65%. Coverage ratio as of 31 December 2020 stood at 149.19%, while at the end of 2019 this stood at 148.60%. In addition, as of 31 December 2020, KASIKORNBANK FINANCIAL CONGLOMERATE's Capital Adequacy Ratio (CAR) according to the Basel III Accord was 18.80%, with a Tier-1 Capital ratio of 16.13%.
Source: Kasikorn Bank