The big three banks reported mixed results for the first half of this year.
Despite lowering loan rates to support vulnerable customers amid a sluggish economic recovery, their overall income growth remained positive.
Bangkok Bank (BBL) and its subsidiaries posted a net profit of 22.3 billion baht for the first half of 2024, up 4.2% from the same period last year.
The bank's net interest income rose by 8.1%, driven by loan growth and higher yields on earning assets, although this was partially offset by increased deposit costs, according to the bank's statement to the Stock Exchange of Thailand (SET).
The net interest margin stood at 3.05%. Additionally, net fees and service income grew as bancassurance and mutual fund services performed strongly.
BBL, the country's largest lender by total assets, set aside 19 billion baht for expected credit losses (ECL) for the first half of this year, aligning with the bank's consistently prudent management approach, the bank said in the statement.
By the end of June, the bank's total loans amounted to 2.71 trillion baht, an increase of 1.8% from the end of last year, primarily due to loans to large corporate clients and loans made through its international network.
The non-performing loan (NPL) to total loans ratio stood at 3.2% for the period.
Meanwhile, Kasikornbank (KBank) reported a net profit of 26.1 billion baht for the first half of 2024, marking a 20.2% increase year-on-year.
This growth was largely driven by a 6.18% rise in net interest income, which totalled 75.9 billion baht.
Additionally, the bank's net fees and service income increased, mainly due to higher fees from fund management and fees from acceptances, aval and guarantees.
As of June 2024, KBank and its subsidiaries had total assets of 4.24 trillion baht, a slight decrease of around 36 billion baht or 0.84% compared to the end of 2023. Despite this, net loans remained stable, consistent with the slow and uneven economic recovery.
The bank has been focusing on improving its credit processes to enhance the efficiency of granting high-quality new loans, aiming for a balanced risk and return profile. The gross NPL to total loans ratio stood at 3.18%.
Bank of Ayudhya (Krungsri) reported a consolidated net profit of 15.7 billion baht for the first half of the year, a decrease of 7.89% year-on-year.
The decline was primarily due to an increase in ECL, driven by prudential provisions for overseas consumer finance subsidiaries and domestic auto hire-purchase loans.
As of June 30, Krungsri's total loans outstanding stood at 1.99 billion baht, down from 2.01 billion baht at the end of December 2023, mainly caused by a contraction in domestic retail loans.
Krungsri's NPL ratio increased to 3.05%, up from 2.53% at the end of December last year.
In response to the uneven economic recovery, the country's leading banks have reduced prime lending interest rates to help alleviate the financial burden of vulnerable customers.
A 0.25 percentage point reduction in loan rates has been available for six months starting from the middle of May.
In a separate development, Kris Chantanotoke, chief executive of Siam Commercial Bank (SCB), a subsidiary of SCB X, said the bank has still classified embattled SET-listed Energy Absolute (EA) as regular loan and has set a normal loan loss reserve for this corporate customer.
SCB, the country's fourth-largest lender by total assets, has extended a credit line of 13 billion baht to EA. Despite EA's strong potential in the renewable energy sector, the bank will closely monitor its business operations, Mr Kris added.
