Krungsri's loan growth for 2023 was at 3.5% mainly driven by domestic commercial loans as well as retail loan expansion particularly with regard to contributions from new overseas subsidiaries, of which SME loan growth was robust at 11.3% in support of customers' term loan and working capital requirements in alignment with increased business activities.
Highlights of Krungsri's consolidated 2023 performance:
- Net profit: Recorded at 32,929 million baht for 2023, representing an increase of 7.2%, or 2,216 million baht from 2022, driven partly by both net interest income and net fee and services income growth contributions from the acquisitions of overseas consumer finance portfolios concluded in 2023.
- Loans: Increased by 3.5%, or 67,795 million baht, from the end of December 2022, mainly driven by domestic commercial loans, as well as retail loan expansion particularly from new overseas subsidiaries. Excluding the newly acquired overseas business volume, organic loan growth marked an increase of 16,611 million baht, or 0.9%.
- Deposits: Increased by 1.9%, or 34,909 million baht, from the end of December 2022, primarily from an increase in time deposits, offset by a decline in savings deposits.
- Net interest margin (NIM): Increased to 3.91% from 3.45% in 2022, driven by an improvement in the yield on earning assets, partly driven by contributions from the acquired overseas consumer finance businesses, despite an increase in the cost of funds.
- Non-interest income: Increased by 21.2%, or 6,920 million baht, from 2022, largely due to net fees and service income which registered notable contributions from overseas subsidiaries, other operating income, and bad debt recoveries.
- Cost to income ratio: Recorded at 44.5%, compared with 43.8% in 2022.
- Non-performing loan (NPL) ratio: Moderated to 2.53%, compared with 2.32% at the end of December 2022. With prudential reserves, particularly for overseas subsidiaries, the credit cost in 2023 amounted to 175 basis points.
- Coverage ratio: Remained healthy at 149.1%.
- Capital adequacy ratio (Bank only): Improved to 18.24%, compared with 17.97% at the end of December 2022.
Krungsri President and Chief Executive Officer Mr. Kenichi Yamato, said "In 2023, the overall Thai economy continued to grow, albeit at a slower pace than expected, largely attributed to soft external demand and domestic K-shaped recovery. Underscoring Krungsri's strategic thrusts pertaining to both financial inclusion and ASEAN expansion, SME and retail loans, particularly the newly acquired ASEAN subsidiaries, were the key drivers for our strong net profit and 3.5% loan growth for the year."
"Notwithstanding an improved outlook with economic growth accelerating to 3.4% for 2024, given the underlying socio-economic challenges, particularly individuals and SMEs impacted by structural changes, Krungsri's key mandate for 2024 will entail continuing assistance programs in support of these vulnerable groups' adjustments and transformation as well as actively addressing persistent debt resolutions supportive to our Banking with Purpose mandate and the Bank of Thailand's Responsible Lending directives at large."
As of 31 December 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, 1.84 trillion baht in deposits, and 2.77 trillion baht in total assets. Krungsri's capital (Bank only) was strong at 309.12 billion baht, equivalent to 18.24% of risk-weighted assets, with 13.56% in common equity tier 1 capital.
Source: Bank of Ayudhya