Kiatnakin Phatra Bank Public Company Limited (SET: KKP) reported a significant improvement in its financial performance for the second quarter of 2025, with a consolidated net profit of Baht 1,409 million. This represents a substantial 83.3% increase compared to the same period in 2024. This strong performance was primarily driven by the Bank’s effective credit quality management, leading to reduced expected credit losses and lower losses from the sale of repossessed vehicles.
Despite the overall positive net profit, total operating income for 2Q25 declined by 5.5% YoY to Baht 6,189 million. This decrease was largely influenced by a 13.9% decline in net interest income, which amounted to Baht 4,312 million. The reduction in net interest income was attributed to a contraction in loan volume, in line with the Bank’s asset quality management strategy focusing on high-quality lending, and lower lending rates reflecting policy rate reductions and customer relief measures. The loan spread for 2Q25 declined to 4.4% from 4.8% in 2Q24.
Conversely, non-interest income demonstrated robust growth, surging by 21.6% YoY to Baht 1,876 million. This growth was primarily fuelled by the sustained strength in net fees and services income, which rose by 24.5%. This was supported by higher contributions from wealth management, asset management, and investment banking businesses, with Kiatnakin Phatra Securities maintaining its leading brokerage market share at 20.83%.
Total other operating expenses saw a 9.3% decrease YoY, totaling Baht 3,454 million. This significant reduction was mainly due to a 41.4% decline in losses from the sale of repossessed vehicles, which amounted to Baht 631 million, aligning with a continuous decline in repossession volumes.
The Bank’s expected credit losses (ECL) decreased by 45.0% YoY to Baht 973 million in 2Q25, reflecting the effectiveness of its asset quality management efforts and a prudent provisioning approach amidst economic uncertainties. The combined credit cost, including expected credit losses and repossessed vehicle losses, improved to 1.78% of average loans, down from 2.89% in 2Q24.
In terms of asset quality, the non-performing loan (NPL) ratio declined to 4.3% in 2Q25 from the previous quarter, indicating well-managed credit quality. Total NPLs, excluding POCI, amounted to Baht 15,481 million, showing an improvement from Baht 15,859 million in 1Q25, primarily driven by the hire purchase segment. The total allowance for expected credit losses to total NPLs ratio (coverage ratio) remained strong at 132.7% at the end of 2Q25.
Total loans (excluding POCI) contracted by 2.6% from the end of 2024, reaching Baht 357,937 million. This aligns with the Bank’s strategic moderation in loan expansion, focusing on segments with strong credit quality and sustainable profitability amidst persistent economic uncertainties and challenges in the automotive sector.
