Kiatnakin Phatra flags export slump as a drag on Thai economic recovery in 2023

KKP Research chief economist Pipat Luengnaruemitchai issued the warning while releasing the company's earnings report on Tuesday. 

He explained the overview of the country's economy under the topic "The hope for the Thai economy amidst the global economic storm".

He said that there are hopes for the Thai economy to recover this year as tourism is picking up and will do even better because China has reopened its borders earlier than expected.

However, with the global economy expected to grow at a slower pace than the previous year and many large business sectors at risk of recession, Thailand's exports, another core engine driving Thai growth, are expected to slow further from the end of last year.

Exports are expected to fall in the first half of 2023 before recovering in the second half as China's economy improves.

According to Pipat, exports will be down 1.8% from the previous year.

Overall, KKP Research has raised its forecast for Thailand's economic growth this year from 2.8% to 3.6%. However, economic risks such as the impact of the global slowdown, high inflation, central bank policy, the uncertainty of Covid-19, and geopolitical tensions must be closely monitored.

Meanwhile, the upcoming Thai election must be closely monitored too because it may introduce another variable that affects the Thai economy.

Aphinant Klewpatinond, KKP's chief executive officer, stated that the company plans to pursue a prudent business growth strategy this year while expanding its potential customer base in response to high inflation, rising interest rates, and a global economic slowdown or recession.

He said that the challenges would have a wide-ranging impact on all customer groups and credit quality.

KKP also intends to increase Group synergy through cross-selling while leveraging its savings and investment digital platforms, such as Dime and Edge.

"At present, the Dime application has over 100,000 users, and KKP plans to collaborate with partners to grow a customer base and develop application features to better meet the needs of diverse customer groups," he said.

Aphinant strongly believed that with a prudent strategy, the company could continue to grow smoothly.

According to its most recent quarterly earnings reports, KKP's net profit in 2022 will be 7.602 billion baht, up 20.3% from the previous year.

The rise was primarily driven by commercial banking, which saw loan growth across all segments reach 21.4%. The capital market continued to generate good revenue, and the brokerage business maintained its top market share.

KKP's fund management revenue increased as well, while investment business grew significantly due to equity and derivative trading in volatile market conditions.

Investment banking revenue was satisfactory, owing largely to transactions in the second half of 2022, he said, while wealth management asset under advice (AUA) was roughly 700 billion baht.

KKP's president, Philip Chen Chong Tan, added that the bank would continue to focus on smart growth in potential customer groups and collateralised loans like auto hire-purchase and home loans.

KKP's loan portfolio increased by 21.4% in 2022, resulting in higher interest and fee income.

In terms of this year's plans, KKP's president intends to expand markets for the recently launched "Rod Riak Ngern" (car for cash) and leverage banking digital channels, such as KKP Mobile and Edge, to connect banking services to KKP's investment services.

Kiatnakin Phatra Financial Group (KKP) was formed by the merger of Kiatnakin Phatra Bank's commercial bank and Kiatnakin Phatra Securities' capital market business.

The group provides clients with financial resources, products, and services, such as corporate loans, real estate loans, SME loans, and retail loans such as car loans, housing loans, personal loans, investment banking, securities brokerage, wealth management, direct investment, and asset management.