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Krungsri logs 2020 net profit of $770 million

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Thailand's Krungsri president and CEO Seiichiro Akita. The Nation (Thailand)

Krungsri logs 2020 net profit of $770 million

Thailand's Krungsri (Bank of Ayudhya and its business units) has announced net profits of 23.04 billion baht ($770 million) for 2020, representing a 14.5 per cent drop from its net profit in 2019.

The bank attributed the sharp drop to provisioning for future uncertainties given the Covid-19 outbreak in mid-December and the fragile outlook for economic recovery.

The bank cited achievements including the status conversion of its Cambodia subsidiary, Hattha Kaksekar Ltd, from a microfinance firm to a commercial bank named Hattha Bank; its ASEAN expansion by acquiring a 50 per cent stake in SB Finance Company, a subsidiary of Security Bank Corp (SBC) in the Philippines; investment in and strategic alliance with Grab; and the successful launch of Kept – an online savings management platform it said has been well-received by target groups.

As of December 31, 2020, Krungsri, Thailand’s fifth largest bank in terms of assets, loans and deposits, reported 2.61 trillion baht in total assets.

Other key highlights of Krungsri’s consolidated 2020 results are a 0.8 per cent rise in loan growth, or 15.058 billion baht, from December 2019, driven by retail and SME loans which grew by 2.2 and two per cent. Corporate loans contracted by 1.5 per cent, mainly due to loan repayments made by Thai corporates.

Deposit growth totalled 1.834505 trillion baht, an increase of 17.1 per cent, or 267.62 billion, from December 2019, attributed to an increase in savings deposits.

Net interest margin (NIM) recorded a 3.47 per cent, from 3.60 per cent in 2019, driven by interest rate reductions following assistance measures for customers impacted by the pandemic.

Non-interest income dropped 3.877 billion baht or 10.6 per cent from normalised non-interest income in 2019, resulting from lower fee and service income following the economic slowdown.

Cost to income ratio improved to 42.52 per cent from 45.1 per cent in 2019.

Non-performing loans (NPL) ratio ended up at two per cent, compared to 1.98 per cent in December 2019.

Coverage ratio hit a new high of 175.12 per cent, from 163.82 per cent in December 2019.

Capital adequacy ratio was at 17.92 per cent, compared to 16.56 per cent in December 2019.

Krungsri president and CEO Seiichiro Akita said the Thai economy would take at least two years before returning to its pre-pandemic level. Krungsri Research forecasts the Thai economy will grow by 2.5 per cent in 2021, from its low base of 6.4 per cent contraction in 2020 – barring heightened risk from the domestic outbreak.

The bank said its capital was strong at 276.26 billion baht, equivalent to 17.92 per cent of risk-weighted assets, with 12.85 per cent in common equity tier 1 capital.



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