Krungsri (Bank of Ayudhya PCL and its business units) posts 23.32 billion baht in net profit for the first nine months of 2022, representing an increase of 21.3% over-year, mainly boosted by normalized expected credit loss and higher net interest income, in line with robust loan growth and improved net interest margin.
An overall improvement in economic activities and domestic investment has vigorously driven Krungsri's commercial lending in 9M/22 with a strong growth in corporate and SME loans of 6.0% and 6.2%, respectively, while the Bank's prudential and responsible lending strategy amidst the country's high household indebtedness resulted in a moderate retail loan growth at 1.6%. Thus, the total loan expansion recorded at 3.9%, together with proactive funding cost management, led to Krungsri's improved net interest margin (NIM) at 3.44% in 9M/22.
Highlights of Krungsri's consolidated 9M/22 performance:
- Net profit: Recorded at 23,322 million baht for 9M/22, on a normalized basis, representing an increase of 21.3%, or 4,098 million baht from 9M/21, driven by normalizing expected credit loss together with higher net interest income.
- Incorporating the extraordinary gain on investments from the sales of shares in Ngern Tid Lor Public Company Limited (TIDLOR) in 2021, net profit decreased by 14.9%, or 4,087 million baht.
- Loans: Increased by 3.9%, or 74,637 million baht from the end of 2021, mainly driven by commercial lending with a robust increase of 6.0% for corporate loans and 6.2% for SME loans, corresponding to the continued economic and domestic demand recovery.
- Deposits: Decreased by 3.7%, or 65,438 million baht from the end of 2021, largely driven by decreased time deposits, corresponding to the Bank's proactive strategy in managing funding cost.
- Net interest margin (NIM): Improved to 3.44% from 3.23% in 9M/21, attributed to loan expansion, and the Bank's effective management of funding structure and cost.
- Non-interest income: Decreased by 2.3%, or 574 million baht on a normalized basis, from 9M/21, while decreasing by 11,302 million baht, or 31.3%, when incorporating the extraordinary gains on investment from the TIDLOR transaction recorded in 2021.
- Cost to income ratio: Recorded at 43.4%, relatively stable from the normalized cost to income ratio at 43.0% in 9M/21, excluding the extraordinary gains from the TIDLOR transaction.
- Non-performing loan (NPL) ratio: Moderated to 2.38%, compared to 2.20% at the end of 2021, partly attributed to qualitative NPL classification underscoring Krungsri's prudential safeguard and rigorous risk management conduct.
- Coverage ratio: Remained healthy at 175.0%, compared to 184.2% at the end of 2021.
- Capital adequacy ratio (Bank only): Recorded at 17.62%, compared to 18.53% at the end of 2021.
Krungsri President and Chief Executive Officer Mr. Seiichiro Akita, said "Supported by the improvement in operating environment and domestic activities, Krungsri continued to deliver strong performance, driven by normalizing expected credit loss together with higher net interest income, while maintaining prudential safeguard and rigorous risk management conduct."
"Notwithstanding uncertainties from the slower-than-expected global economy, the Thai economic recovery is to continue gaining traction and growing at 3.1% for 2022, driven mainly by tourism and private consumption particularly for the remaining quarter of the year. The measured monetary policy normalization will not only mitigate increased inflation risks but also support sustainable economic recovery, both in terms of business sectors and household income. Krungsri maintains the loan growth guidance at the upper end of the 3 - 5% target range for 2022."
As of 30 September 2022, 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 1.97 trillion baht in loans, 1.71 trillion baht in deposits, and 2.59 trillion baht in total assets. Krungsri's capital (Bank only) was strong at 297.13 billion baht, equivalent to 17.62% of
risk-weighted assets, with 12.99% in common equity tier 1 capital.