Ms. Kattiya Indaravijaya, CEO of Kasikorn Bank, revealed that Thailand's economic activities in the second quarter of 2024 are still showing slow and uneven signs of recovery, despite some momentum from the gradual disbursement of government funds following the implementation of the 2024 budget at the end of April 2024 and the growth of the tourism sector. However, the industrial production and household spending continue to face pressure from costs, debt burdens, and limited income recovery. For the remainder of 2024, while the Thai economy may sustain growth due to accelerated budget disbursement and exports benefiting from a low base compared to the same period last year, it is essential to monitor the impact on businesses from rising costs related to energy expenses and minimum wage increases, as well as the details and clarity of government economic stimulus measures for the rest of 2024.

Amid various challenges, Kasikorn Bank remains focused on advancing its 3+1 strategy to deliver sustainable value to all stakeholders within the context of an uncertain economy.

In the second quarter of 2024, the bank and its subsidiaries reported a net profit of 12.653 billion baht, a decrease of 6.18% compared to the previous quarter, primarily due to a decline in net interest income and net fee and service income, while net income from insurance increased. Operating expenses amounted to 21.888 billion baht, up 5.67%, but still within the bank's management framework. The bank has set aside expected credit loss (ECL) provisions of 11.672 billion baht, similar to the previous quarter, in line with ongoing prudence to ensure reserves are at an appropriate level, reflecting the current situation and supporting uncertainties that may affect economic recovery, with the coverage ratio for expected credit losses on non-performing loans increasing from the previous quarter to 151.87%.

Net operating income totaled 50.429 billion baht, with net interest income decreasing by 1.060 billion baht or 2.75% due to the overall slow and uneven economic recovery, alongside efforts to enhance the quality of new loan disbursements. Additionally, the bank has lowered interest rates on loans to assist vulnerable customers in recovering better and raised deposit interest rates beforehand. Net fee and service income decreased by 221 million baht or 2.66%, partly due to fees from card businesses and guarantees, although net income from insurance improved. Other operating expenses amounted to 21.888 billion baht, increasing due to marketing activities and business operations, as well as technology expenses to support customer service expansion and one-time employee support expenses. The bank managed employee expenses within the overall budget framework, resulting in an operating expense ratio to net operating income (Cost to income ratio) of 43.40%.

For the six-month period of 2024, the bank and its subsidiaries reported operating profit before expected credit loss provisions and income tax of 57.981 billion baht, an increase of 7.36%, driven by net operating income growth outpacing other operating expenses due to effective cost management and operational efficiency, resulting in a cost to income ratio of 42.35%, down from the same period last year. Furthermore, the expected credit loss provisions decreased from the same period last year, maintaining a prudent reserve approach to support uncertainties that may affect economic recovery, leading to a net profit of 26.139 billion baht, an increase of 20.26% from the same period last year.

Net operating income reached 100.581 billion baht, up 6.27%, with net interest income at 75.996 billion baht, increasing by 6.18% in line with market conditions, and a net interest margin (NIM) of 3.73%. The bank reduced loan interest rates in the second quarter of 2024 to assist vulnerable customers in recovering better. Net fee and service income grew mainly from fund management fees and guarantees, along with increased investment income and foreign exchange income corresponding to the recovery of tourism. Meanwhile, other operating expenses totaled 42.600 billion baht, up 4.82% due to marketing expenses aligned with increased business volume and technology expenses to support customer service expansion.

As of June 30, 2024, the bank and its subsidiaries had total assets of 4,247.540 billion baht, a slight decrease of 36.016 billion baht or 0.84% from the end of 2023. However, net loans remained stable amid a slow and uneven economic recovery, reflecting the bank's efforts to enhance the quality of new loan disbursements while managing risk and return balance appropriately. The non-performing loan ratio (%NPL gross) stood at 3.18%, slightly down from the previous quarter. The total capital ratio to risk-weighted assets for Kasikorn Bank's financial group, in accordance with Basel III guidelines, remained strong at 19.42% as of June 30, 2024.