The solid earnings were in line with healthy loan growth at 3.5% and improved net interest margin (NIM) to 3.70% in 9M/23, notwithstanding higher operating expenses corresponding to increased business volume and activities, as well as expected credit loss as a prudential safeguard for overseas subsidiaries.
Highlights of Krungsri's consolidated nine-month 2023 performance:
- Net profit: Recorded at 25,198 million baht for 9M/23, representing an increase of 8.0%, or 1,876 million baht from 9M/22, due mainly to a strong growth in operating performance from both net interest income and non-interest income.
- Loans: Increased by 3.5%, or 67,428 million baht, from the end of December 2022, mainly driven by SME and retail loans from new overseas subsidiaries in 2Q/23.
- Deposits: Decreased by 1.8%, or 32,464 million baht, primarily due to a decline in savings deposits, offset by an increase in time deposits.
- Net interest margin (NIM): Markedly increased to 3.70% from 3.44% in 9M/22, driven by an improvement in the yield on earning assets, in alignment with rising interest rates and funding cost.
- Non-interest income: Notably increased by 9.6%, or 2,386 million baht, from 9M/22, largely due to net fees and service income and other non-interest income.
- Cost to income ratio: Recorded at 44.2%, compared with 43.4% in 9M/22, underscoring the marketing and promotion expenses corresponding to business volume growth and the employee expenses, mainly resulting from the acquisitions of new business entities in 2Q/23.
- Non-performing loan (NPL) ratio: Moderated to 2.48%, compared with 2.32% at the end of December 2022, primarily reflecting the Bank's rigorous risk management practices. Meanwhile, credit cost stood at 149 basis points.
- Coverage ratio: Remained healthy at 155.1%.
- Capital adequacy ratio (Bank only): Improved to 18.38%, compared with 17.97% at the end of December 2022.
Krungsri President and Chief Executive Officer Mr. Kenichi Yamato, said "Our continually growing top-line performance was preliminarily driven by higher net interest income and non-interest income, underscoring both domestic and overseas contributions, while maintaining a prudential safeguard and rigorous risk management conduct."
"The Thai economy overall continued to grow in 9M/23, albeit at a slower pace than expected due to soft external demand. Growth should pick up in 4Q/23, mainly attributable to the favorable expansion of private consumption, a steady tourism recovery, and the low base effect in the fourth quarter of the prior year. The Bank maintains our 2023 loan growth outlook at the target range of 3 - 5%."
As of 30 September 2023, 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 2.02 trillion baht in loans, 1.77 trillion baht in deposits, and 2.76 trillion baht in total assets. Krungsri's capital (Bank only) was strong at 309.12 billion baht, equivalent to 18.38% of risk-weighted assets, with 13.66% in common equity tier 1 capital.
Source: Bank of Ayudhya