KBank's Strategic Acquisition in Muang Thai Group Holding
K
KASIKORNTHAI
1Q23 Financial Performance
Consolidated
ธนาคารกสิกรไทย
开泰银行 KASIKORNBANK
Notes (1Q23)
NIM increased YoY, mainly due to higher yield in line with interest rate
3.3 3.45% trend, despite higher cost of fund from interest rate and FIDF. More than
90% of interest income received in cash.
Y2022 Actual 1Q23 Actual
Y2023 Targets
NIM
3.33%
3.46%
-1.20% YTD
Loan Growth
3.03%
5-7%
0.28% YoY
Net Fee Income
-6.89%
-8.13% YoY
Flat
Growth¹)
YTD loans decreased from SME, Credit Cards, Personal loan, and from
NPL outflow management, while Regional and KLeasing increased.
Cost to Income
43.15%
42.50%
Ratio²)
Credit Cost per
211 bps
205 bps
year (bps)
Low to
Mid-40s
Net fee income decreased YoY from high-base Brokerage and Fund
Management Business in 1Q22 in line with market conditions.
Cost to income decreased YoY as net total income increased, despite
higher operating expense (mainly due to one-time employee expenses
for cost of living subsidy measures). Focus on cost management and
productivity improvement, with new investments for future growth.
In 1Q23, we detected deterioration, worth 6% of ECL, in a single large
175-200 bps corporate loan. We took immediate action, covering the potential loss
with management overlay. The level of management overlay temporarily
dropped but stayed within our 15-20% comfort range.
NPL Ratio
3.19%
(Gross) ³)
3.04%
< 3.25%
ROE4)
ROA
7.38%
0.86%
8.43%
1.01%
N/A
N/A
In 2023, the credit cost will hold in the range of 175-200 bps. We expect
extra effort will be needed to keep credit cost within this range because
of our ongoing, proactive asset quality cleanup efforts and this one-time
deterioration in a large corporate loan. However, credit cost may hit the
upper bound of the target range or slightly exceed it, rising to no more
than 210 bps.
Note: 1) Net Fee Income Fees and Service Income - Fees and Service Expense; 2) Cost to Income Ratio Total Other Operating Expenses to Total Operating Income - net (Total Operating income less Underwriting Expenses); 3) NPL Ratio (Gross).
= NPL (gross) to total loans; NPL (gross) used in the calculation are loans to general customers and loans to financial institutions that are non-performing loans; total loans used in the calculation are loans to general customers and loans to financial
institutions; 4) ROE = Net profit deducted Additional Tier 1 dividend after tax/Average total equity excluded Additional Tier 1
K
KASIKORNTHAI
Y2023 Financial Targets
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ธนาคารกสิกรไทย
开泰银行 KASIKORNBANK
NIM
Consolidated
Loan Growth
Y2022
Actual
2023
NDR Targets
3.33%
3.3-3.45%
3.03%
5-7%
Net Fee Income Growth*
-6.89%
Flat
Cost to Income Ratio**
43.15%
Low to
Mid-40s
Notes (Y2023)
NIM rising due to higher interest rates and small ticket size
lending strategy, despite higher FIDF contribution.
Loans increase from regional expansion strategy and more
corporate lending; continued focus on quality using effective
data analytics capability.
Net fee income may decrease from lower conventional
transaction fees due to changing consumer behavior; wealth
management business continues to expand.
Moderate revenue growth; projecting higher potential
investment expenses for future growth; continuing cost
management and productivity improvements.
Credit cost peaked in Y2022. Continue proactive asset quality
175-200 bps clean up and prudent financial policy; credit cost will remain
high but gradually drop in Y2023. The credit cost will cover
future uncertainties, in line with global economic
circumstances and business strategy.
Credit Cost per year (bps)
211 bps
NPL Ratio (Gross)***
ROE****
3.19%
< 3.25%
ROA
N/A
N/A
7.38%
0.86%
Note: *Net Fee Income Fees and Service Income - Fees and Service Expense; ** Cost to Income Ratio = Total Other Operating Expenses to Total Operating Income - net (Total
Operating income less Underwriting Expenses); *** NPL Ratio (Gross) = NPL (gross) to total loans; NPL (gross) used in the calculation are loans to general customers and loans to financial
institutions that are non-performing loans; total loans used in the calculation are loans to general customers and loans to financial institutions **** ROE = Net profit deducted Additional Tier 1
dividend after tax/Average total equity excluded Additional Tier 1
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