High Expected Credit Loss Pressures KKP’s Profit in 2Q23 to Decline 30%

Kiatnakin Phatra Bank Public Company Limited (SET: KKP) announced its 2Q23 consolidated financial statement through the Stock Exchange of Thailand as follows;

Quarter 2Q23 2Q22
Net Profit (Loss)
Million Baht
1,408.29 2,033.28
Earning Per Share
1.6600 2.4000
% Change -30.74
6 Months 2023 2022
Net Profit (Loss)
Million Baht
3,493.16 4,088.63
Earning Per Share (Baht) 4.13 4.83
% Change -14.56

The consolidated net profit of the bank for 2Q23 totaled Baht 1,408 million, a decline of 30.7% YoY with comprehensive income of Baht 1,311 million, declining by 28.2% YoY. For the first half of 2023, the consolidated net profit totaled Baht 3,493 million with comprehensive income totaled Baht 3,450 million, a decline of 14.6% and 8.7% YoY respectively.

For 2Q23, the Bank continued to generate strong operating income with YoY increase of 20.8% driven by the robust growth in net interest income of 23.4% and also growth in non-interest income of 13.7% YoY. The Bank continued to focus on asset quality management and prudently set up provisions resulting in an increase in expected credit loss amount. The increase in expected credit loss is a result of the expanded loan portfolio and also to accommodate the impact to loan quality from uneven economic recovery and intense competition in the market. As such, the Bank recorded an increase in expected credit losses, which for 2Q23 totaled Baht 1,878 million.

The Bank continued to focus on efficient cost management with cost to income1 ratio for 2Q23 declining to 37.8% compared to 40.9% YoY. The Non-Performing Loans2 (NPLs) to total loans ratio for 2Q23 increased to 3.6% compared to 3.3% level at the end of 2022, with total allowance for expected credit losses to total NPLs ratio (coverage ratio) at 143.1%.