Krungsri's loan growth for 2022 was broad-based encompassing all customer segments, with strong expansion in corporate and SME loans at 3.8% and 5.3%, respectively, resonating a rebound in overall economic activity and domestic private investment expenditures that boosted working capital and liquidity requirements. This, together with effective funding structure contributed to a marked increase in net interest income and higher net interest margin (NIM).
Highlights of Krungsri's consolidated 2022 performance:
- Net profit: Recorded at 30,713 million baht for 2022, on a normalized basis, representing an increase of 19.9% or 5,104 million baht from 2021, driven by improving provisions together with higher net interest income, corresponding to both loan expansion and better net interest margin achieved during the year.
Incorporating the extraordinary gains on investments from the sales of shares in Ngern Tid Lor Public Company Limited (TIDLOR) recorded in 2021, net profit decreased by 9.1%, or 3,081 million baht.
- Loans: Increased by 3.1%, or 59,033 million baht from the end of December 2021. Loan growth was broad-based, encompassing all customer segments, with corporate and SME loans grew by 3.8% and 5.3%, respectively.
- Deposits: Increased by 1.4%, or 25,553 million baht, from the end of December 2021, mainly driven by an increase in savings deposits.
- Net interest margin (NIM): Increased to 3.45% from 3.24% in 2021 from improved yield on earning assets while funding cost remained stable.
- Non-interest income: Decreased by 4.6%, or 1,561 million baht on a normalized basis from 2021, while decreasing by 12,288 million baht, or 27.4%, when incorporating the extraordinary gains on investment from the TIDLOR transaction recorded in 2021.
- Cost to income ratio: Recorded at 43.8%, marginally increasing from 2021 normalized cost to income ratio at 43.2 %, if excluding the extraordinary gains from the TIDLOR transaction.
- Non-performing loan (NPL) ratio: Registered at 2.32% as of end of December 2022, compared to 2.20% at the end of December 2021. Under Krungsri's risk management rigor, a provision level at 136 basis points of credit cost was recorded in 2022.
- Coverage ratio: Remained healthy at 167.4%.
- Capital adequacy ratio (Bank only): Recorded at 17.97%, decreasing from 18.53% at the end of December 2021.
Krungsri President and Chief Executive Officer Mr. Seiichiro Akita, said "Advocating Thailand's economic growth and continued business recovery efforts, Krungsri delivered solid 2022 operating results with broad-based loan expansion, encompassing both commercial and retail customer segments. Still, the Bank continues to be vigilant on risk management practices and selective growth strategy."
"Looking ahead to 2023, while anticipating multifaceted uncertainties that could weaken global economic conditions and undermine Thailand's economic growth prospects, namely recession and geopolitical risks; yet tourism and private consumption will carry on 2022's momentum as key growth drivers and help alleviate the impact of global slowdown on domestic economy. Krungsri expects the Thai economy to expand at 3.6% for 2023."
As of 31 December 2022, Krungsri, Thailand's fifth largest bank in terms of assets, loans and deposits, and one of Thailand's Domestic Systemically Important Banks (D-SIBs), reported 1.95 trillion baht in loans, 1.80 trillion baht in deposits, and 2.64 trillion baht in total assets. Krungsri's capital (Bank only) was strong at 300.70 billion baht, equivalent to 17.97% of risk-weighted assets, with 13.23% in common equity tier 1 capital.
Source: Bank of Ayudhya PCL