Kasikornbank Public Company (KBANK) Q2 2024 earnings summary

Executive summary

• Achieved 1H24 net profit of THB 27,997 million, up 21% YoY, driven by higher net operating income, effective cost management, and lower ECL; financial statements audited and compliant with Thai standards.

• NIM rose to 3.73% in 1H24, up YoY in line with interest rate trends, but declined QoQ due to quality-focused lending and cost of funds repricing.

• Net fee income grew 3.47% YoY, mainly from fund management and commercial fees, with a continued focus on wealth management.

• Cost to income ratio improved to 42.35% in 1H24, reflecting ongoing productivity and cost control initiatives.

• NPL ratio remained stable at 3.18% with a coverage ratio of 151.87%; credit cost was 188bps, aligned with targets and maintained at a high level for prudence.

Financial highlights

• 1H24 net profit: THB 27,997 million (+21% YoY); NIM: 3.73%; ROE: 9.85%; ROA: 1.23%.

• Net interest income up 6.18% YoY; non-interest income up 6.58% YoY, mainly from higher fee income and FX revenue.

• Loan portfolio at THB 2,488 billion, down 0.11% YTD; deposits at THB 2,664 billion, down 1.7% YTD; loans to deposits ratio at 93.4%.

• Cost to income ratio: 42.35% (improved YoY); other operating expenses up 4.82% YoY, mainly from marketing and IT.

• Earnings per share for the six months was THB 10.87, compared to THB 9.02 for the same period last year.

Outlook and guidance

• 2024 targets: NIM to be maintained, loan growth 3-5%, net fee income growth mid to high single digit, cost to income low to mid-40s, credit cost 175-195bps, NPL ratio <3.25%.

• Focus on quality loan growth, especially in secured lending and selective sectors; continued emphasis on asset quality and prudent risk management.

• The bank is closely monitoring credit risk and has increased ECL overlays to address economic uncertainties and potential global slowdown.

• Dividend payout policy: not less than 25% of consolidated net profit, subject to prudence; interim dividend of THB 1.50 per share for 2024 approved for payment in September 2024.