Krungsri boosts net profit 9.6% for first quarter

Krungsri (Bank of Ayudhya and its business units) said its net profit rose 9.6 per cent to Bt5.65 billion in the first quarter of this year, compared with the same period last year.
This quarterly result was delivered amid what the bank called “the seasonality impact generated from repayments of loans by customers”. Underlining the robust results in the first quarter were the solid performances in both net interest income and non-interest income.
Highlights of Krungsri’s first quarter results: 
• Non-interest income: increased by 4.3 per cent from the last quarter of 2016, mainly driven by an increase in auto hire-purchase fees, wealth and fund management and securities-related fees, and gain on investment. 
• Net interest margin (NIM): recorded at 3.82 per cent, improved from 3.79 per cent in the fourth quarter of last year.
• Cost to income Ratio: Recorded at 48.8 per cent, improved from 49.9 per cent in the final quarter of 2016. 
• Loan growth: decreased by 1.2 per cent, or Bt16.84 billion from December 2016. 
• Deposit growth: increased by 1. 5 per cent , or Bt17.17 billion from December 2016. 
• Non-performing loans (NPLs): Recorded at 2.33 per cent in March 2017. 
• Coverage Ratio: remained strong at 143 per cent. 
• Capital Adequacy Ratio: recorded at 14.4 per cent, compared to 14.2 per cent recorded in December 2016.
On a quarter-on-quarter basis, net profit increased by or 9.5 per cent from the previous quarter,
Loans stood at Bt1.43 trillion, a decrease of 1.2 per cent, or Bt16.84 billion from December 2016. The loan contraction in the first quarter resulted from repayments of corporate working capital lines and seasonally lower retail spending for credit cards and personal loans. Meanwhile, auto hire purchase and mortgage portfolios continued to expand at 2.9 per cent and 2 per cent respectively.
Deposits totalled Bt1.13 trillion, an increase of 1.5 per cent, or 17.17 billion baht, from December 2016. The growth in deposits resulted from an increase in time deposits with maturity less than one year in the amount of Bt23.05 billion.
Net interest margin (NIM) remained strong at 3.82 per cent, underscoring the improvement in funding costs driven by the shift from higher cost borrowing to lower rate ones.
Non-performing loans recorded at 2.33 per cent and coverage ratio was strong at 143 per cent.
Krungsri president and chief executive Noriaki Goto said: “We continue to deliver a robust growth in net profit in the first quarter of 2017, underlining our priorities to grow asset, reduce cost of fund, and increase non-interest income. The solid performance was largely attributed to higher operating profit and lower provision expense. This underscores both Krungsri’s competitive strength and well-balanced portfolio.”
Commenting on the overall business outlook for 2017, Mr. Goto said.
“While the economic growth momentum continued, we expect the momentum to gain further traction in the latter part of the year, supported by an acceleration in government spending, robust growth in the tourism sector, and improved export outlook. Driven by improving agricultural prices and lowering household leverages, an expansion in consumption is also expected. Under this outlook, we maintain our GDP forecast of 3.3 per cent which contributes to a broad-based loan growth in the range of 6-8 per cent for 2017.”
As of March 31, Krungsri, Thailand’s fifth largest bank, reported Bt1.43 trillion in loans, Bt1.13 trillion in deposits, and Bt1.86 trillion in total assets. The Bank’s capital was strong at Bt191.28 billion, equivalent to 14.4 per cent of risk-weighted assets with 11.9 per cent in common equity tier 1 capital.