20 April 2022
Bangkok (20 April 2022) –
Krungsri (Bank of Ayudhya PCL and its business units) posts 7,418 million baht in net profit for the first quarter of 2022, thanks to lower expected credit loss from improving asset quality, while sustaining priority in supporting business rehabilitation and economic recovery amidst the prolonged pandemic and geopolitical conflicts.
Despite challenges in business environment, Krungsri’s total loans grew by 2.0% in the first quarter, mainly driven by stronger demand for corporate and SME loans which surged by 3.9% and 4.0%, respectively, underpinning improved business sentiment and continued economic recovery. Asset quality metrics remained resilient with the low non-performing loan (NPL) ratio at 2.03%, while the coverage ratio robustly strengthened to a new record high at 191.6%.
Highlights of Krungsri’s consolidated first-quarter performance:
- Net profit: Recorded at 7,418 million baht, representing an increase of 1,033 million baht, or 16.2% from 4Q/21, mainly driven by lower expected credit loss, underlining improving asset quality. Compared to 1Q/21, the net profit increased by 913 million baht, or 14.0%, driven largely by higher operating profit together with lower expected credit loss.
- Loans: Increased by 2.0% or 38,194 million baht from the end of 2021, stemming from the demand for corporate and SME loans which grew 3.9% and 4.0%, respectively.
- Deposits: Increased by 2.8% or 50,041 million baht over-quarter, largely driven by growth in savings deposits, reflecting improved CASA-mix.
- Net interest margin (NIM): Recorded at 3.28% compared to 3.41% in the previous quarter.
- Non-interest income: Decreased by 502 million baht, or 5.7%, from 4Q/21 mainly caused by a decrease in net fees and service income from a high-base effect of seasonal factors observed in the previous quarter.
- Cost to income ratio: Improved continually to 42.7%, from 43.9% in 4Q/21, mirroring effective discretionary expense management, in alignment with 2022’s cost to income ratio target at mid-40s%.
- Non-performing loan (NPL) ratio: Improved to 2.03% at the end of March 2022, compared to 2.20% at the end of 2021.
- Coverage ratio: Reached a new record high of 191.6%, improving from 184.2% at the end of December 2021.
- Capital adequacy ratio (Bank only): Remained strong at 18.25%, compared to 18.53% at the end of 2021.
Krungsri President and Chief Executive Officer Mr. Seiichiro Akita, said “Governed by Krungsri’s prevailing priority in supporting business rehabilitation and economic recovery amidst the Omicron outbreak and Russia-Ukraine conflicts, loans continued to expand at 2.0% for the first quarter of 2022. The key growth driver for the quarter was stronger demand for corporate and SME loans, underpinning improved business sentiment and continued economic recovery.”
“Notwithstanding the outbreak of Omicron variant since the beginning of 2022, the Thai economic recovery momentum in the first quarter continued to be supported by the expansion in exports, together with the economic stimulus measures to boost domestic spending. While Krungsri is of the view that the Thai economic recovery will remain intact in 2022, yet impacts of the current geopolitical crisis which led to higher energy and commodity prices and a potential slowdown in external demand have posed downside risks to the prior forecast. Krungsri thus revised 2022 GDP growth forecast to 2.8% from 3.7%.”
As of 31 March 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 1.93 trillion baht in loans, 1.83 trillion baht in deposits, and 2.61 trillion baht in total assets. Krungsri’s capital (Bank only) was strong at 291.34 billion baht, equivalent to 18.25% of risk-weighted assets, with 13.32% in common equity tier 1 capital.