Ms. Khatia Inthawichai, CEO of Kasikorn Bank revealed that the Thai economy in 2023 is still expanding in an uneven manner (K-Shaped Recovery), as tourism begins to recover. At the same time, economic activities in other areas continue to face pressure from rising costs. Household debt and living expenses The slowdown in the global economy as well as the global financial market during the year was very volatile. The recovery began at the end of the year after financial markets assessed US interest rates had reached their highest point.
For 2024, although the Thai economy should grow better but various challenges faced by the global economy are still at risk due to slower growth. Especially the American economy is affected by high interest rates, and the Chinese economy is still facing problems related to the fragility of the financial sector and the real estate market, in addition to the need to follow local factors. Including government measures to support the economy as well.
In 2023, the bank and its subsidiaries achieved a net profit of 42,405 million baht, an increase of 18.55% compared to the previous year, which was a low base. However, including the economic situation that is gradually improving in some parts, the bank still maintains a large amount of expected credit losses, similar to last year. To accommodate the uncertainty of economic factors that may occur. The bank still adheres to the principle of caution when considering reserves. To continuously enhance and increase non-interest income mainly from profits from investments in various financial instruments according to market conditions through a policy of diversifying investment risks in assets around the world. Including income related to tourism business from opening the country.
At the same time, net interest income increased in accordance with market conditions. Although loan growth slowed slightly compared to the previous year, the focus on asset quality management increased flexibility in providing assistance to different client groups, along with modernizing the process to increase the bank's new lending capabilities to be more efficient. As for operating expenses, the increase was in line with the increase in income depending on the volume of business. The ratio of other operating expenses to net operating income (cost to income ratio) was 44.10%, a slight increase from the previous year, which amounted to 43.15%.
Operating income increased by 19,396 million baht, or 11.19%, while net interest income reached 148,444 million baht, an increase of 11.61% in line with market conditions. Net interest income has not yet deducted debt management costs in various matters and operating expenses. Compared to the income-generating asset base, the net interest margin was 3.66%. In addition, non-interest income increased by 3,950 million baht or 9.81%, mainly from investment management domestically and abroad. Income from trade and foreign exchange transactions increased according to the size of the business. This is consistent with the partial recovery of the tourism sector, but net fees and service revenues decreased by 1,702 million baht or 5.17%, mainly due to brokerage fees from securities trading. Fees collected from financial transfers and net income from underwriting decreased according to market conditions.
The expected credit loss (ECL) in 2023 is 51,840 million baht, a similarly high amount as last year. Taking into account the principle of constant caution in order to enhance and support uncertainties that may arise from the global economic situation and to take care and help enhance the potential of customers' business operations. Increased flexibility in managing asset quality, and the ratio of the provision for expected credit losses to non-performing loans (coverage ratio) as of December 31, 2023 reached 152.23%.
Other operating expenses increased by 10,215 million baht or 13.67%, mainly due to an increase in operating expenses in line with turnover income, such as customer service expenses. Marketing costs and information technology expenses to be able to answer service needs and support customer needs, including maintaining the security of customer information, in addition to increased employee-related expenses. Part of this measure is assistance with living expenses, which are one-time expenses at the beginning of the year. As for the ratio of other operating expenses to net operating income (cost to income ratio), it reached 44.10%, a slight increase from the previous year, which reached 43.15%.
As of December 31, 2023, the total assets of the Bank and its subsidiaries amounted to 4,283,556 million baht, an increase of 37,187 million baht or 0.88% from the end of 2022, mainly due to the increase in net interbank and money market items. This is the normal liquidity management of a bank. Include various financial assets according to market conditions under quality management. Meanwhile, net lending slowed slightly. By upgrading the process to increase the bank's new lending capabilities to be more efficient. and managing asset quality in light of the economic slowdown, including assisting vulnerable clients after the end of the Bank of Thailand’s assistance measures in 2023, which helped clients obtain a better financial position. The ability to conduct business continuously and can lead to the recovery of the overall economic system
In addition, the recognition of accrued interest depends on the amount actually expected to be received. The ratio of non-performing loans to total loans (% of gross non-performing loans) was 3.19% for the total capital adequacy to risk-weighted assets ratio of the business group. Kasikorn Bank's financial performance under Basel III guidelines as of December 31, 2023 remains strong at 19.41% with a Tier 1 capital ratio of 17.44%.
By InfoQuest News Agency (January 19, 2024)
Tags: KBANK, Khattiya Inthawichai, Kasikorn Bank, operating results, Thai stocks
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