20 July 2021
Bangkok (20 July 2021) –
Krungsri (Bank of Ayudhya PCL and its business units) reports its first-half 2021 net profit of 21,048 million baht, with a continuous SME loan growth at 3.5% mainly driven by the Bank’s efforts to alleviate financial hardship of SME borrowers impacted by COVID-19, while maintaining vigilant risk management with solid asset quality and the low NPL ratio at 2.03%.
Multiple series of assistance measures, ranging from debt restructuring, debt moratorium extension, and soft loans, to the asset warehousing program, were offered over the first six months of 2021 in easing impacts of the economic retrenchment and providing additional liquidity support to both businesses and households.
Highlights of Krungsri’s consolidated first-half 2021 performance:
- Net profit: Recorded at 21,048 million baht, representing an extraordinary increase of 55.5% from 1H/20, attributed to significantly higher non-interest income, driven by the recognition of gains on investments from the sales of shares in Ngern Tid Lor Public Company Limited (TIDLOR) in 2Q/21.
- Excluding the aforementioned extraordinary gain, the normalized net profit for 1H/21 contracted by 5.0%, or 678 million baht from 1H/20, driven mainly by a decrease in net interest income, largely resulting from lowered interest rates offered to lessen debt burdens of businesses and retail customers impacted by the prolonged pandemic.
- Loan growth: Underpinning Krungsri’s efforts to provide additional liquidity support to the SME segment, loans to SMEs grew continuously at 3.5% or 9,775 million baht from the end of December 2020, while corporate and retail loans contracted 1.2% and 1.6%, respectively.
- Deposit growth: Increased by 3.1% or 56,434 million baht from the end of December 2020, largely driven by savings deposits.
- Net interest margin (NIM): Recorded at 3.08% in 1H/21.
- Non-interest income: Robustly increased by 11,913 million baht, or 75.0%, from 1H/20, mainly driven by the recognition of gains on investments from the sales of shares in Ngern Tid Lor Public Company Limited (TIDLOR).
- Cost to income ratio: Recorded at 43.4%, compared to 41.4% in 1H/20. Including the gains from the TIDLOR transaction, the cost to income ratio improved to 37.1%.
- Non-performing loan (NPL) ratio: Remained low at 2.03% at the end of June 2021, compared to 2.00% at the end of December 2020.
- Coverage ratio: Maintained at a high ratio of 175.8%, compared to 175.1% at the end of December 2020.
- Capital adequacy ratio (Bank only): Recorded at 17.80%, moderating from 17.92% at the end of December 2020.
Krungsri President and Chief Executive Officer Mr. Seiichiro Akita, said “Krungsri stays focused on priorities in alleviating adverse impacts for businesses and households, and supporting the economic recovery through both credit and debt restructuring measures as well as additional liquidity and rehabilitation support as necessary.”
“The asset quality will be vigilantly monitored and managed in ensuring both safety and soundness, while prudential oversight will also be strictly imposed to ensure high levels of capital fund and loan loss provision in withstanding further financial and economic challenges.”
“Notwithstanding the notable expansion in exports, in line with an increase demand from key trading partner economies, the latest wave of the coronavirus outbreak - which became more prolonged and severe owing to viral mutations in 2Q/21 - derailed the recovery momentum and posed significant downside risks to both domestic economy and tourism sector recovery. Krungsri thus revised 2021 GDP growth forecast to 1.2% from 2.0% on 16 July 2021.”
As of 30 June 2021, Krungsri, Thailand’s fifth largest bank in terms of assets, loans and deposits, and one of Thailand’s five Domestic Systemically Important Banks (D-SIBs), reported 1.82 trillion baht in loans, 1.89 trillion baht in deposits, and 2.66 trillion baht in total assets. The Bank’s capital (Bank only) was strong at 275.46 billion baht, equivalent to 17.80% of risk-weighted assets, with 12.76% in common equity tier 1 capital.