Krungsri reports first-half 2024 earnings of 15.75 billion baht
Krungsri (Bank of Ayudhya PCL and its business units) posts 15.75 billion baht in net profit for the first half of 2024, contracting by 7.9% over-year, mainly due to a rise in prudential provisions, while operating profit growth was supported by full recognition of revenue streams from ASEAN entities acquired in 2023 and higher domestic operating income.
In sustaining the economic and business growth momentum, while fully committed to the Bank of Thailand’s responsible lending guidelines, in 1H/24, Krungsri’s corporate and SME loans grew at 0.8%, thanks to the Bank’s support for businesses’ working capital requirements, while retail loans contracted by 3.5%, underlining strict lending standards amidst a high debt-servicing burden of borrowers. Consequently, total loans contracted by 1.3%.
Highlights of Krungsri’s consolidated first-half 2024 performance:
• Net profit: Recorded at 15,752 million baht for 1H/24, decreasing 7.9%, or 1,350 million baht from 1H/23, due mainly to a rise in expected credit loss (ECL) driven by prudential provisions. Operating profits grew at 26.0%, or 9,128 million baht year-over-year, supported by full recognition of revenue streams from the ASEAN entities acquired in 2023 and higher domestic operating profits.
• Loans: Decreased by 1.3% or 25,273 million baht from the end of December 2023, partly driven by a contraction of 3.5% in retail loans underlining strict lending standards amidst a high debt-servicing burden of borrowers. Nevertheless, an expansion of 0.8% in corporate and SME portfolios, thanks to the Bank’s support for businesses’ working capital requirements,
was observed for the period.
• Deposits: Increased by 4.2% or 76,787 million baht from the end of December 2023 mainly from time deposits.
Net interest margin (NIM): Markedly increased to 4.31% from 3.52% in 1H/23, driven by
the improvement in yield on earning assets, in part driven by contributions from the overseas consumer finance businesses acquired in 2023, despite an increase in the cost of funds.
Non-interest income: Increased by 26.6%, or 4,708 million baht from 1H/23, largely driven by net fees and service income from the overseas consumer businesses acquired in 2023,
an increase in bancassurance domestically, an increase in bad debt recoveries, and gains on financial instruments measured at fair value through profit or loss (FVTPL).
Cost to income ratio: Recorded at 43.3%, improving from 43.6% in 1H/23.
Non-performing loan (NPL) ratio: Stood at 3.05%. Meanwhile, credit cost was at 243 basis points. The coverage ratio was recorded at 128.8%.
Capital adequacy ratio (Bank only): Recorded at 17.87%, compared with 18.24% at the end of December 2023.
Krungsri President and Chief Executive Officer Mr. Kenichi Yamato, said “In the first half of 2024, Thailand’s economic momentum continued to be driven by the tourism sector, a rebound in private investment in related sectors, as well as modest expansion in exports corresponding to trading partners’ economic improvements. Yet, the growth dynamic was restrained by a delay in 2024 budget disbursement, which weighed down public spending and consumer confidence at large, together with an enduring high level of household indebtedness.”
“Against such backdrops, Krungsri continued to proactively perform our role in sustaining the economic and business growth momentum, while fully committed to the Bank of Thailand’s responsible lending guidelines which came into effect early this year. We anticipate accelerating economic activities in 2H/24 and in alignment with our full year GDP growth forecast of 2.4% for the year.”
As of 30 June 2024, Krungsri, Thailand’s fifth largest bank in terms of assets, loans and deposits, and one of Thailand’s Domestic Systemically Important Banks (D-SIBs), reported 1.99 trillion baht in loans, 1.92 trillion baht in deposits, and 2.77 trillion baht in total assets. Krungsri’s capital (Bank only) was strong at 307.83 billion baht, equivalent to 17.87% of risk-weighted assets, with 13.75% in common equity tier 1 capital.
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