Sustaining the economic and business growth momentum, while fully committed to the new responsible lending guidelines, SME loans continued to grow by 2.7% in 1Q/24, offset by the seasonal contraction in large corporate and retail loans, resulting in a slight decrease in total loans by 0.9% from the end of December 2023. Thanks to robust demand conditions in regional markets, Krungsri's ASEAN loans grew 4.0% in 1Q/24.
Highlights of Krungsri's consolidated first-quarter 2024 performance:
- Net profit: Recorded at 7,543 million baht for 1Q/24, representing a decrease of 13.1%, or 1,133 million baht from 1Q/23, largely driven by an increase in provisions as a safeguard in light of future uncertainty that could impact asset quality domestically and overseas, underscoring Krungsri's rigorous and prudential risk management approach.
- Loans: Decreased by 0.9%, or 17,252 million baht from the end of December 2023, mainly driven by the seasonal contraction in large corporate and retail loans. Meanwhile, SME and ASEAN loans continued to grow by 2.7% and 4.0%, respectively.
- Deposits: Increased markedly by 8.9%, or 164,500 million baht from the end of December 2023, largely due to an increase in time deposits.
- Net interest margin (NIM): Recorded at 4.16%, increasing from 3.35% in 1Q/23, largely attributed to the expansion of the high-yield segment's outstanding balance resulting from the acquisitions of overseas consumer business entities in 2Q/23 and 4Q/23, as well as an increase in lending rates.
- Non-interest income: Increased by 26.9%, or 2,383 million baht from 1Q/23, primarily driven by net fees and service income, from the overseas consumer business entities acquired in 2Q/23 and 4Q/23.
- Cost to income ratio: The well-controlled operating expenses resulted in the better cost to income ratio at 43.0%, compared with 44.4% in 1Q/23.
- Non-performing loan (NPL) ratio: Recorded at 2.69% compared with 2.53% at the end of December 2023. With prudential reserves, particularly for overseas subsidiaries, the credit cost in 1Q/24 amounted to 248 basis points. Excluding the ASEAN portfolio, the NPL ratio stood at 2.30%.
- Coverage ratio: Remained healthy at 141.5%.
- Capital adequacy ratio (Bank only): Recorded at 18.08%, compared with 18.24% at the end of December 2023.
Krungsri President and Chief Executive Officer Mr. Kenichi Yamato, said "The continued economic momentum in 1Q/24, albeit at a slow pace, was in part driven by strong support from the service sector, namely the tourism sector, the rebound in private investment and manufacturing in certain sectors. Meanwhile, a delay in the 2024 budget, which weighed down public spending, together with enduring high level of household indebtedness, remained key headwinds for the period."
"Against such backdrops, Krungsri continued to proactively play our role in sustaining the economic and business growth momentum, while fully committed to the new responsible lending guidelines which came into effect early this year. We forecast the Thai economy to grow at 2.7% in 2024, relatively faster than the previous year, aligning with Krungsri's loan growth target at
3-5% for this year."
As of 31 March 2024, 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 2.00 trillion baht in loans, 2.00 trillion baht in deposits, and 2.86 trillion baht in total assets. Krungsri's capital (Bank only) was strong at 310.29 billion baht, equivalent to 18.08% of risk-weighted assets, with 13.44% in common equity tier 1 capital.
Source: Bank of Ayudhya