FRIDAY, March 29, 2024
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Krungsri sees Bt13.5-billion first-half net profit, a 31% decrease Y-O-Y

Krungsri sees Bt13.5-billion first-half net profit, a 31% decrease Y-O-Y

Krungsri (Bank of Ayudhya and its business units) reported a first-half net profit of Bt13.5 billion – a 31.4 per cent decrease compared to the same period last year, the bank said in a press statement yesterday (July 21).

The acute contraction was attributed to extraordinary one-time gains on investment from the sale of 50 per cent of shares in Ngern Tid Lor Company Limited,  recorded in the first half of 2019.

Excluding the one-off items in the first half last year, net profit for 1H/2020 decreased by 2.9 per cent, or Bt400 million, from 1H/19, mainly caused by an increase in expected credit losses of Bt4.3 billion, based on the adoption of TFRS 9 and corresponding to a prudential safeguard in light of the severe economic downturn.
Here are some highlights of Krungsri’s consolidated 1H/2020 results, according to the bank:
• Net profit: Bt13.5 billion in 1H/20.
• Loan growth: increased by 2.0%, or Bt36.9 billion, from December 2019, mainly driven by the bank’s support in meeting the commercial segment’s working capital needs, particularly liquidity backing under the soft loan programme for SME customers. In 1H/20, corporate loans and SME loans increased by 4.3% and 3.3% respectively, meanwhile retail loans contracted by 0.1%.
• Deposit growth: increased by 8.4%, or Bt131.8 billion, from December 2019, and in line with the industry’s development.
• Net interest margin: 3.74% in 1H/20, compared to 3.69% in 1H/19, driven by lower cost of funds.
• Non-interest income: decreased by 40.3%, or Bt10.7 billion, from 1H/19, mainly caused by the absence of one-time gains on investments in 1H/19 and a decrease in net fees and service income, resulting from deteriorating retail business activities against the backdrop of a faltering economy. Excluding the one-off items booked in 1H/19, non-interest income decreased by 11.7%, or Bt2.1 billion, from the same period last year.
• Cost-to-income ratio: 41.4%, compared to the normalised cost-to-income ratio at 45.4% in 1H/19, reflecting the bank’s proactive expense management in light of the current unfavourable operating environment.
• Non-performing-loan ratio: 2.20%, compared to 1.98% in December 2019.
• Coverage ratio: 156.2%, compared to 163.8% in December 2019.
• Capital adequacy ratio: recorded at 16.61%.
“The severe global economic slowdown as well as national lockdowns caused by the coronavirus crisis have led to a sharp contraction in economic activity, particularly in Thailand’s tourism and service industries,” Krungsri president and chief executive officer Seiichiro Akita said. “The Thai economy in 2020 is expected to experience the deepest recession ever recorded,” he warned.
“Krungsri has introduced a series of pre-emptive measures to alleviate the financial burden for both commercial and retail customers. As of June 30, total outstanding loans under Krungsri’s customer relief programmes accounted for approximately 29 per cent of total outstanding loans, comprising 1,792,820 retail customer accounts and 36,490 commercial customers. With SMEs being most impacted under the commercial customer segment, other than the aforementioned debt relief measures, additional credit lines of Bt18.3 billion were offered to over 5,700 SME customers to boost their liquidity under the Bank of Thailand’s and the Government Savings Bank’s soft loan programmes,” he said.
“Notwithstanding the Thai government’s ability to effectively contain the pandemic, together with a gradual and cautious reopening of the economy, vulnerabilities and uncertainties still exist. The economic growth projection for 2020 has been revised to a 10.3 per cent contraction, eroding from a 5.1 per cent regression forecast, as the coronavirus pandemic takes a toll on domestic consumption and investment and pummels outbound merchandise and services,” Akita said.
“To brace for heightening uncertainties for the remainder of the year, asset quality will be vigilantly monitored and managed to ensure both safety and soundness. Meanwhile, Krungsri will continue to provide support for customers and overall economic activities,” he vowed.

As of June 30, Krungsri reported Bt1.85 trillion in loans, Bt1.7 trillion in deposits, and Bt2.51 trillion in total assets. The bank’s capital is strong at Bt271.91 billion, equivalent to 16.6 per cent of risk-weighted assets, with 11.77 per cent in common equity tier 1 capital, the company said.

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