Sun, October 24, 2021

business

Kasikornbank announces Bt29.48-billion net profit for 2020


Kasikornbank and its subsidiaries reported a net operating profit of Bt29.48 billion for 2020, with fourth-quarter net profit being Bt13.25 billion, the bank said in a press release.

KBank Chief Executive Officer Kattiya Indaravijaya said the overall economy contracted in 2020 amid the domestic and global impact by Covid-19. The crisis negatively impacted domestic spending, exports and tourism. 

“The economy faces additional downside risks in 2021, particularly with the new wave of Covid-19. Therefore, economic recovery remains highly uncertain, while government expenditure and investment will remain key supportive factors,” she said.
"Since January 1, 2020, the bank and its subsidiaries have adopted TFRS related to financial instruments. Some items are not comparable with the financial statements and key financial ratios of previous years," the press release said.
It added that KBank and its subsidiaries reported a 2020 net profit of Bt29.48 billion, a decrease of Bt9.24 billion, or 23.86 per cent compared to the previous year, mainly due to the fact that the bank and its subsidiaries complied with the prudent approach of setting aside a higher-than-expected credit loss from the preceding year of Bt9.53 billion, or 28.04 per cent, with reserves of Bt32.06 billion since the first half of 2020 due to high uncertainty from the Covid-19 pandemic.
With relief measures gradually ending in the second half of 2020, customers were still able to repay debts better than expected, and with the new wave of Covid-19 in late fourth quarter, the bank had revisited and assessed the adequacy of its reserves and found they were sufficient. 
The bank expected a credit loss amounting to Bt43.54 billion for 2020 – a level that could cover potential damages occurring in line with the situation, the statement said, adding that net interest income increased by Bt6.33 billion, or 6.17 per cent, mainly due to a decrease in interest expenses as a result of a drop in the average interest rate and a decrease in contributions to the Financial Institutions Development Fund, resulting in NIM that stood at 3.27 per cent. 
Meanwhile, non-interest income was down by Bt11.93 billion, or 20.65 per cent, mainly due to a decrease in revenue from securities sales and fees income related to loans, which changed to reflect interest income, it said. 
In addition, other operating expenses dropped by Bt2.73 billion, or 3.76 per cent, mainly due to a decrease in estimated employee and marketing expenses, while those for debt management increased. 
“In the quarter, other operating expenses increased by Bt3.82 billion, or 23.26 per cent, due mainly to the increase in IT-related expenses in order to support customers’ needs, marketing expenses due to seasonality and activities with business partners, resulting in a cost-to-income ratio that stood at 45.19 per cent,” the release said.
“As of December 31, 2020, the total assets of KBank and its subsidiaries were Bt3,658,798 million, an increase of Bt364,909 million, or 11.08 per cent, compared to the end of 2019. The majority came from loans, while NPL gross-to-total loans stood at 3.93 per cent,” it said. “The bank has provided support and assured customers impacted by Covid-19 of credit quality, while at the end of 2019 this stood at 3.65 per cent.” 
The coverage ratio as of December 31 stood at 149.19 per cent, while at the end of 2019 this stood at 148.60 per cent, the statement said. 
In addition, as of December 31, Kasikornbank Financial Conglomorate’s capital adequacy ratio, according to the Basel III Accord, was 18.80 per cent, with a Tier-1 Capital ratio of 16.13 per cent, the bank added.

Published : January 21, 2021

By : The Nation