21 January 2021
Bangkok (21 January 2021) –
Krungsri (Bank of Ayudhya PCL and its business units) announced a performance for 2020 with a net profit of 23,040 million baht, representing a 14.5% decrease from normalized net profit in 2019. The acute contraction was attributed to the prudential provisioning against the backdrop of future uncertainties given the resurgence of COVID-19 cases in December 2020 and fragile economic recovery outlooks. The asset quality remains strong with NPL ratio at 2.00% and the coverage ratio at a record high of 175.12%.
Amid challenging economic conditions, Krungsri still continued driving four strategic pillars focusing on customer experience enhancement, data-driven capabilities, partnership strategy, and overseas business expansion. Examples of achievement include the conversion of the status of Hattha Kaksekar Ltd., Krungsri’s subsidiary in Cambodia, from a microfinance company to a commercial bank named Hattha Bank Plc., the expansion to ASEAN with the 50% stake acquisition of ownership in SB Finance Company, Inc, a subsidiary of Security Bank Corporation (SBC) in the Philippines, investment in and strategic alliance with Grab, and the successful launch of ‘Kept’ – an online savings management platform which has been well received by our target groups. Furthermore, Krungsri adopted proactive and agile approaches to cope with COVID-19 and economic volatility in the 2H2020, focusing on continued customer support, maintaining strong asset quality, and efficiently managing operating expenses.
Key highlights of Krungsri’s consolidated 2020 results:
- Net Profit: Recorded at 23,040 million baht, representing a 14.5% decrease from normalized net profit in 2019, largely due to higher prudential provisioning.
- Loan Growth: Increased by 0.8%, or 15,058 million baht, from December 2019, driven by retail and SME loans which grew by 2.2% and 2.0%, respectively. Meanwhile, corporate loans contracted by 1.5%, mainly due to loan repayments made by Thai corporates.
- Deposit Growth: Totaled 1,834,505 million baht, an increase by 17.1%, or 267,620 million baht, from December 2019, attributed to an increase in savings deposits.
- Net Interest Margin (NIM): Recorded a 3.47%, moderating from 3.60% in 2019, driven by interest rate reductions following assistance measures for customers impacted by the COVID-19 outbreak.
- Non-Interest Income: Decreased 3,877 million baht or 10.6% from normalized non-interest income in 2019, resulting from lower fee and service income following the economic slowdown.
- Cost to Income Ratio: Improved to 42.52% from 45.1% normalized cost to income ratio in 2019, reflecting effective operating expense control.
- Non-Performing Loans (NPL) Ratio: Recorded low level at 2.00%, compared to 1.98% in December 2019, reflecting its prudential control and management of asset quality.
- Coverage Ratio: Recorded at new high of 175.12%, compared to 163.82% in December 2019.
- Capital Adequacy Ratio: Remained strong at 17.92%, compared to 16.56% in December 2019.
Krungsri President and Chief Executive Officer Mr.Seiichiro Akita, said “Krungsri is of the view that the Thai economic recovery would take at least two years before returning to the pre-pandemic level. And, barring the heightened risks pertaining to the recent domestic outbreak of COVID-19, Krungsri Research forecasts the Thai economy to grow by 2.5% for 2021, from the low base which is a contraction of 6.4% in 2020. Furthermore, the recovery is expected to be uneven across economic sectors and firms in different industries.”
“In 2021, as a Domestic Systemically Important Bank (D-SIB), coupled our robust financial strength, Krungsri will continue to be prudent and vigilant on our risk management, while continuing our preemptive assistance measures across impacted industries and customer segments and supporting the Thai economic recovery at large.”
As of 31 December 2020, 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 1.83 trillion baht in loans, 1.83 trillion baht in deposits, and 2.61 trillion baht in total assets. The Bank’s capital was strong at 276.26 billion baht, equivalent to 17.92% of risk-weighted assets, with 12.85% in common equity tier 1 capital.