Banking profits slip away in first 6 months
Pandemic makes sour loan prospects rise
Most financial institutions reported lower first-half net profits and higher bad loans, mainly from higher provisions for loan losses, in line with rising loan delinquency prospects triggered by the coronavirus outbreak.
Kasikornbank (KBank) and its subsidiaries announced a net profit for the first half this year of 9.6 billion baht, down 52.2% year-on-year.
Net profit in the second quarter was 2.2 billion baht, down 78.1% year-on-year.
The bank's gross non-performing loan (NPL) ratio, as of June this year, increased to 3.88% from 3.36% year-on-year.
KBank, the country's largest lender by total assets, reported operating profit before expected credit loss and income tax expense of 46 billion baht for the first half, up 6.50% year-on-year.
Higher loan-loss provisions and financial assistance measures for the outbreak affected the bank's operating results.
KBank chief executive Kattiya Indaravijaya said the bank and its subsidiaries set aside higher expected credit losses of 16.9 billion baht, a rise of 112% year-on-year, in the first half.
For the first half this year, the bank's net interest income (NII) increased by 4.17 billion baht or 8.12%, mainly from loan growth and the Thai Financial Reporting Standard 9 (TFRS9) changing the effective interest rate calculation.
KBank's net interest margin stood at 3.34% as of June.
Non-interest income declined by 1.81 billion baht or 7%, mainly attributed to a decline in credit fees from changes on interest income and lower net income from insurance.
As of June 30, gross NPLs stood at 3.92% of total loans, rising from 3.65% logged at the end of last year.
Tisco Bank recorded first-half net profit of 2.81 billion baht, down 20.1% year-on-year, while net profit for the second quarter stood at 1.33 billion, down 25.9%.
The reduction resulted mainly from an economic slowdown and the pandemic, weakened asset quality and the adoption of accounting standard TFRS9.
Tisco's NPL ratio was 3.28% as of June, up from 2.56% in March, mainly from hire-purchase loans and loans against auto licences, which is the bank's core business.
TMB-Thanachart Bank reported a first-half net profit of 7.25 billion baht, up 108% year-on-year, while net profit for the second quarter this year was 3.09 billion, up 61.4%.
A surge in net profit was supported by the integration and financial consolidation between TMB Bank and Thanachart Bank.
NII and non-NII slowed down from the first quarter to 13 billion baht and 3.5 billion, down 7% and 15.8% year-on-year, respectively.