The local banking sector reported higher net profit for 2021 thanks to lower loan-loss provisions and improved operating profit, despite challenging economic conditions given the impact of the prolonged pandemic.
Nine SET-listed banks announced total consolidated net profit for 2021 of around 161 billion baht, up 32.7% year-on-year.
As of press time Krungthai Bank Plc had not reported its financial results.
The improved profit was supported by a continued reduction of loan-loss reserves, in line with Thailand's recovering economy, although several uncertainties remain amid the prolonged pandemic.
CIMB Thai Bank (CIMBT) recorded net profit growth of 89.2% year-on-year in 2021, mainly attributed to better cost controls, resulting in an 8.1% decline in operating expenses and a 25.7% decrease in expected credit losses (ECLs), despite a 3.9% drop in operating income.
Bangkok Bank (BBL), the country's largest lender by total assets, set aside 8.12 billion baht for ECLs in the fourth quarter of 2021 and 34.1 billion throughout last year in line with its prudent approach.
The bank continues to assess and closely monitor the impact of the pandemic, including the Omicron variant and potential risks arising from new variants.
Kasikornbank (KBank) and its subsidiaries reported net profit of 38.1 billion baht for 2021, an increase of 29.1% over the previous year, attributed to a decrease in ECLs amounting to 3.21 billion baht or 7.38%.
KBank and its subsidiaries considered setting aside ECLs of 40.3 billion baht last year as part of a prudent approach.
Siam Commercial Bank (SCB) reported a consolidated net profit of 35.6 billion baht, a 30.9% increase year-on-year, mainly thanks to higher operating profit and lower provisions.
Pre-provision operating profit grew 7.9% year-on-year to 86.8 billion baht, mainly as a result of non-interest income growth and effective cost control.
The bank set aside total loan-loss provisions of 42 billion baht for 2021, which was 9.9% lower than in 2020, after elevated provisioning the year before.
Bank of Ayudhya (BAY), using the marketing name Krungsri, recorded net profit for 2021 of 33.8 billion baht, rising 47% year-on-year.
The gain was driven by investments from the sales of shares in subsidiary Ngern Tid Lor Plc (Tidlor) in the second quarter of last year.
Excluding the one-time gain from the Tidlor transaction, a normalised net profit of 25.6 billion baht was recorded in 2021, representing an increase of 11.1% from 2020.
Krungsri president and chief executive Seiichiro Akita said the company continued to demonstrate the spirit and responsibilities expected from Domestic Systemically Important Banks, a central bank grouping.
The bank achieved the twin objectives of strengthening its financial resiliency while advancing assistance to businesses and households affected by the pandemic through relief measures in the short term, as well as sustaining loan demand to support business rehabilitation and economic recovery in the longer term, he said.
Mr Akita said multiple waves of Covid-19 infections during the year and corresponding containment measures led to the slowdown in both economic and business activities, delaying an economic recovery in 2021.
The Thai economy is expected to grow 1.2% in 2021 and 3.7% in 2022, he said.
Many Thai banks are monitoring what happens with the Omicron variant as more outbreaks will limit the extent of any tourism recovery and, to a lesser extent, an economic revival.