KBANK’s 4Q22 Earnings Plunge 70% amid Significant Rise in Expected Credit Loss

Kasikornbank Public Company Limited (SET: KBANK) has announced its annual financial statement of 2022 through the Stock Exchange of Thailand as follows;

Year 2022 2021
Net Profit (Loss)
Million Baht
35,769.49 38,052.72
Earning Per Share
14.7800 15.7700
% Change -6.00
Quarter 4Q22 3Q22
Net Profit (Loss)
Million Baht
3,191.00 10,574.00
Earning Per Share (Baht) 1.35 4.29
% Change -69.82

KBANK reported a slight annualized decrease by 6% of net profit, compared to 2021. However, its net profit plunged 70% from Baht 10,574 million in 3Q22 to Baht 3,191 million in 4Q22. Despite a better performance from net interest income and non-interest income, the decrease in net profit was mainly due to its significant surge in expected credit loss by 130% in the fourth quarter of 2022. The bank noted that an increase in ECL was due to its continuously adopting a prudent approach and to cope with uncertainties of economic circumstance. 

For the fourth quarter of 2022 compared with the third quarter of 2022, net interest income amounting to Baht 36,148 Million, an increase of Baht 3,060 Million or 9.25%, mainly due to an increase in interest income from loans to customers. 

Meanwhile, non – interest income amounting to Baht 13,251 Million, an increase of Baht 4,604 Million or 53.26%, mainly from other income that increased by Baht 4,415 Million or 286.73%, mainly due to the mark to market of financial assets according to market conditions.

Other operating expenses amounting to Baht 21,042 Million, an increase of Baht 2,791 Million or 15.29%, mainly due to marketing expenses increased which due to collaboration with business partners in line with revenue increased according to business volume, while employee expenses decreased. 

Coverage ratio as of 31 December 2022 stood at 154.26%, increased from 148.74% at the end of September. Meanwhile, NPL gross to total loans stood at 3.19%. 

During the spread of Covid-19, the Bank of Thailand had announced several debt restructuring measures to ease burden from borrowers. However, those measures ended on 31 December 2022. Still, KBANK was the only major commercial banks as of now to record an increase in expected credit losses at a significant amount.