In the second quarter of 2024, Thailand's overall economy continued to expand, mainly driven by domestic demand, tourism recovery, accelerated government disbursements, and growth in Thai exports as a result of a pickup in the pace of orders and export bases shifting to Thailand. In the latter half of the year, Thailand's economy is expected to be supported primarily by tourism recovery, foreign investments, and government disbursements. Nonetheless, critical factors requiring close monitoring include global economic uncertainties, China's economic slowdown due to issues in the real estate sector, and the potential impact of the U.S. Presidential election at the end of this year on trade policies and the global geopolitical landscape.
Although the Thai economy is projected to recover, business operations continue to face challenges from advances in technology and new innovations, the global issue of climate change raising concern about the environment, society, and good governance along with shifts in government policies and regulations. As a "trusted partner and reliable close friend", the Bank is focusing on providing advice to support customers' business operations. This includes the ongoing development of necessary skills and knowledge for business adaptation, supporting the creation of partnerships in the business ecosystem, and reinvesting in environmentally friendly economic activities, as well as assisting customers to tap into opportunities to expand their business overseas. At the same time, the bank continues to adhere to guidelines for responsible lending with an emphasis on social responsibility and sustainable growth.
Bangkok Bank reports a net profit of Baht 22,330 million for the first half of 2024
Bangkok Bank and its subsidiaries reported a net profit of Baht 22,330 million for the first half of 2024, an increase of 4.2 percent from the same period last year. Net interest income increased by 8.1 percent led by loan growth and a rise in yields on earning assets, offsetting by an increase in cost of deposits. This resulted in a net interest margin of 3.05 percent. Net fees and service income increased as bancassurance and mutual fund services continued to perform well, while gains on financial instruments measured at Fair Value Through Profit or Loss (FVTPL) declined in line with the market environment. Operating expenses was at the similar level as the same period last year due to disciplined cost management, resulting in the cost to income ratio of 45.6 percent. In the first half of 2024, the Bank set aside Baht 19,007 million in expected credit losses under the Bank's consistently prudent management approach.
Bangkok Bank continues to operate under its prudent management approach and retains financial, liquidity and capital positions at a healthy and appropriate level to deliver strong and sustainable growth
At the end of June 2024, the Bank's total loans amounted to Baht 2,719,989 million, an increase of 1.8 percent from the end of last year mainly from loans to large corporate customers and loans made through the Bank's international network. The non-performing loan to total loans ratio was 3.2 percent, being a manageable level, couple with the strong allowance for expected credit losses to non-performing loan ratio of 282.5 percent. This is a result of the Bank's continuous prudent management approach.
As of June 30, 2024, the Bank's deposits amounted to Baht 3,184,856 million, a similar level to the end of last year with the loan to deposit ratio of 85.4 percent. The total capital adequacy ratio, Tier 1 capital adequacy ratio, and Common Equity Tier 1 capital adequacy ratio of the Bank and its subsidiaries stood at 19.5 percent, 16.1 percent and 15.3 percent respectively, comfortably above the Bank of Thailand's minimum capital requirements.