Kiatnakin Phatra Financial Group (KKP) announces performance in the first half of 2022 improved continuously due mainly to commercial banking. Loans grew by 10 percent from the end of 2021, especially in the auto hire purchase and home loan segment which absorbed demand from quality segment from the recent economic downturn. However, the economic outlook still faces inflation risk. Interest rate and household debt remain high. As a result, KKP will continue with 'smart growth' approach in the second half of 2022, as it expands businesses through technology while continuing to assist customers affected by prolonged economic stagnation.KKP had a net profit of THB 4,089 million, up by 45.1 percent compared to 2021.
Mr. Aphinant Klewpatinond, Chief Executive Officer, Kiatnakin Phatra Financial Group, revealed that "KKP's performance in the first half of 2022 improved continuously. Commercial bank loans, especially hire purchase and home loans, grew by 10 percent. In the capital market segment, revenues are diversified across various businesses. Brokerage business retained #1 market share at 18.18 percent, while investment business grew considerably from equity and derivative trading, which made good profits despite volatile conditions. As for investment banking, the number of transactions declined at the beginning of the year, but large transactions are expected in the second-half year. Meanwhile, wealth management business had asset under advice (AUA) of THB 7 hundred billion baht. The bank has reduced its provisions to be in line with the quality of the new credit portfolio. Debtor repayment rate was better than expected, as a provision of THB 1,878 million was set aside, a considerable decrease from the previous year.
KKP will continue to focus on commercial banking and capital markets to develop complete and seamless services for customers and diversify sources of income to prepare for a more volatile future. KKP will leverage the country's financial technologies and infrastructure that reduce size or network constraints to allow the bank to compete equally with others. For example, KKP Edge that offers wealth management services to a wider range of customers or Dime that is about to launch digital products and services. At the same time, KKP continue investing in systems for its core businesses, such as loans that we believe to have rooms for growth. For this year, we have set a net loan growth target of 16 percent.
However, KKP views that the overall economic outlook is still grim due to inflation, high interest rate, and high household debt. We have thus prepared to assist customers who may be affected by prolonged economic slowdown caused by the COVID-19 pandemic. However, sustainable relief efforts rather than immediate measures will be emphasized in order to best benefit customers during prolonged economic downturn."
Mr. Philip Chen Chong Tan, President, Kiatnakin Phatra Bank Public Company Limited, further commented on commercial banking that "The smart growth policy has proven to be effective, allowing the bank to achieve revenue and profit growth even in the face of economic slowdowns. Moreover, effective risk screening and management measures helped keep credit quality at an appropriate level. In the first half of 2022, bank loans generated interest income of 69 percent, mainly from secured retail loans, including auto hire purchase loans (up by 11 percent) and home loans (up by 19 percent).
For our next steps, the bank will continue to build on core businesses. We will streamline internal systems and processes to make credit approval more efficient and accessible through the KKP Mobile app, launch new credit products like KKP Auto, and expand the service network through partnerships. In addition, to help alleviate high household debt and support sustainable growth, the bank will strive to empower customers financially by increasingly linking our banking services to investment services."
Mr. Preecha Techarungchaikul, Head of Finance and Budgeting, Kiatnakin Phatra Bank Public Company Limited, revealed financial information of the first half of 2022 that "KKP had a net profit of THB 4,089 million, up by 45.1 percent. Net profit from the capital markets was THB 672 million. Provision in the first half of 2022 was reduced as loan quality remained at a manageable level, with an NPL coverage ratio of 169.1 percent.
Furthermore, the bank saw an increase in both net interest and non-interest incomes. Net interest income amounted to THB 8,779 million, up by 15.1 percent, while non-interest income was THB 3,809 million, up by 2.2 percent from the first half of 2021. The bank had a BIS ratio of 16.56 percent, which was calculated according to the Basel III rules and included profits up to the end of Q2/2022, and Common Equity Tier 1 of 12.99 percent."