Ms. Kattiya Indaravijaya, Chief Executive Officer of KASIKORNBANK, said Thai economic activity in the second quarter of 2024 showed signs of a slow and uneven recovery, despite some momentum from the gradual disbursement of government spending after the 2024 Budget Act came into effect in late April 2024, and the expansion of the tourism sector. Manufacturing production and household spending were challenged by production costs, debt burdens, and incomes that have not fully recovered. For the remainder of 2024, the Thai economic recovery will likely stay on track due to the acceleration of budget disbursement and exports that will benefit from a low base in the same period last year. However, business sector impacts from rising costs, following increases in energy and minimum wage costs, must be monitored together with any clarification of details of the government’s economic stimulus measures for the remainder of 2024.

Amidst the challenges of various factors, KBank continues to focus on 3+1 strategic priorities to deliver sustainable value to all stakeholders in unpredictable economic environment.

In the second quarter of 2024, KBank and its subsidiaries reported net profit of Baht 12,653 million, a decrease of 6.18% compared with the preceding quarter, mainly due to net interest income and net fees and service income decreased, while net premiums earned - net gradually recovered. Other operating expenses of Baht 21,888 million, an increase of 5.67%, remain under cost and productivity management framework of the Bank. KBank set aside expected credit loss (ECL) of Baht 11,672 million, which was in line with the preceding quarter, and in alignment with the on-going prudent approach that ECL was at suitable level, reflecting the current situation and supporting uncertainties of various factors that may affect the economic recovery. Coverage ratio increased from the previous quarter, and was at 151.87%.

Net total operating income was Baht 50,429 million, with a decrease in net interest income of Baht 1,060 million or 2.75%, due to a slow and uneven overall economic recovery along with revamping credit process to increase efficiency in granting quality new loans. Moreover, the Bank reduced interest rate on loans to help current vulnerable customers to recover better and increased interest rate on deposits in the previous period. Net fees and service income decreased by Baht 221 million or 2.66%, due to fees from card business and fees from acceptance, aval and guarantee, although net premiums earned - net gradually recovered. Other operating expenses of Baht 21,888 million, increased from marketing activities aligning with the business direction, IT-related expenses to support the expansion of customers service channels, and one-time employee subsidy measure by managing overall employee expenses within integrated budget management. As a result, cost to income ratio stood at 43.40%.

Operating performance for the six month of 2024, KBank and its subsidiaries reported operating profit before expected credit loss and income tax expense of Baht 57,981 million, an increase of 7.36% from net total operating income that grew higher than other operating expenses as a result of the Bank and its subsidiaries’ continued cost management and productivity improvement. As a result, cost to income ratio stood at 42.35%, a decrease from the same period of 2023. Moreover, expected credit loss (ECL) decreased from the same period of 2023 in alignment with the on-going prudent approach and supporting uncertainties of various factors that may affect the economic recovery. As a result, net profit was amounting to Baht 26,139 million, an increase of 20.26% from the same period of 2023.

Net operating income was Baht 100,581 million, an increase of 6.27%, mainly from net interest income of Baht 75,996 million which increased by 6.18% in line with market conditions. Net interest margin ratio stood at 3.73%. The Bank reduced interest rate on loans in the second quarter of 2024 to help current vulnerable customers to recover better. Net fees and service income grew mainly due to fees from fund management, and fees from acceptance, aval and guarantee. Moreover, investment income and revenue from foreign exchange transactions also increased, partly in line with the recovery of tourism. Other operating expenses of Baht 42,600 million, an increase of 4.82%, from marketing expenses which were in line with business volume, and IT-related expenses to support the expansion of customer service channels.

As of 30 June 2024, KBank and its subsidiaries’ total assets were Baht 4,247,540 million, a slight decrease of Baht 36,016 million or 0.84% over the end of 2023. However, net loans remained stable, which was in line with a slow and uneven overall economic recovery and along with the Bank’s focus on revamping credit process to increase efficiency in granting quality new loans in order to reflect an appropriate risk and return level. NPL gross to total loans was 3.18%, which was slightly lower compared with the previous quarter. In addition, as of 30 June 2024, KASIKORNBANK FINANCIAL CONGLOMERATE’s Capital Adequacy Ratio (CAR) according to the Basel III Accord remained strong at 19.42%.