KKP Expects Loan Growth of 8-12%First Half Saw Revenue Growth from Capital Market,Setting aside Provision for Risks
(29 July 2021) Kiatnakin Phatra Financial Group or KKP reported in an online press conference on 29 July that in the first half of 2021 KKP’s overall business considerably grew, resulting in a net profit of THB 2,817 million in commercial banking and capital markets, up by 5.6 percent compared to 2020. Loan portfolio grew by 6.6 percent from the end of 2020, especially collateralized loans such as auto hire purchase loans, retail home loans, and corporate lending. This success was due to the prudent growth strategy, which enabled KKP to generate good returns amid economic uncertainty, together with effective operating cost control.
Kiatnakin Phatra Securities continued to rank No.1 in market share in the brokerage business and benefited from increased trading volume. Assets under wealth management business and fund management business were up 13 percent and 12 percent, respectively. Investment banking generated large revenue from completion of transactions in the first half year, while direct investment reported THB 1,103 million in comprehensive income.
Mr. Aphinant Klewpatinond, Chief Executive Officer, Kiatnakin Phatra Financial Group, revealed that “KKP’s strong performance are the result of our income diversification, especially our capital markets business that is much less affected by the COVID-19 situation than other economic sectors. However, as a preventive measure against the pandemic situation, which remains uncertain and may affect the ability of debtors to meet their financial obligations, the bank has set aside a high provision of THB 1,378 million in the second quarter of 2021, a portion of which is the management overlay. As our experience clearly shows that the impact of COVID-19 on different customer groups has been uneven, KKP has set a loan growth target of 8-12 percent in good quality segment to help balance out the impact from affected portion. We are also fully prepared to provide relief and assistance to our affected customers.”
Mr. Philip Chen Chong Tan, President, Kiatnakin Phatra Bank Public Company Limited, further commented on commercial banking that “In the COVID-19 situation, maintaining loan growth in quality segments will help keep loan portfolio returns at a satisfactory level. Therefore, the bank’s lending strategy emphasizes prudent growth in customer groups with high-potential along with cautious provisioning for loan loss and effective cost control. Moreover, the bank attaches great importance to providing relief to customers affected by COVID-19, including retail and business loan customers, especially with the assumption that the road to recovery will be prolonged. The bank has used the payment data of customers affected by COVID-19 to design relief measures that best meet customer needs. To date, the bank has provided relief to loan customers, accounting for more than 40 percent of the bank’s total loans.”
Mr. Preecha Techarungchaikul, Head of Finance and Budgeting, Kiatnakin Phatra Bank Public Company Limited, gave details of the first half 2021 results that “KKP had a net profit of THB 2,817 million, up by 5.6 percent from the first half of 2020. Net profit from the capital markets was THB 936 million. The provision for 2021 had an NPL-to-loan ratio of 160.1 percent. The bank also saw an increase in both net interest income and non-interest income. Net interest income amounted to THB 7,624 million, up by 6.6 percent. Non-interest income was THB 3,726 million, up by 13.2 percent from the first half of 2020. The bank’s BIS ratio calculated based on the Basel III rules, which included profit up to the end of Q2/2021, was 17.89 percent and the Common Equity Tier 1 was 13.51 percent.”