Five major Thai banks report combined net profits of THB138.9 bn for 2023

In their announcements of their fourth quarter financial performance, the five commercial banks —TMBThanachart Bank Plc (TTB), CIMB Thai Bak Plc, SCB X Plc, Krungsri (Bank of Ayudhya) Plc, and Kasikornbank Plc — said their profits were a result of higher net interest income, net fee and services and mostly effective cost management.

SCBX was the top profit earner with 43.5 billion baht, followed by KBank 42.405 billion baht, Krungsri 32.929 billion baht, TTB 18.462 billion baht and CIMB 1.605 billion baht.

Financial analysts had forecast their combined profit at 120 billion baht.

When the analysts released the expected figures earlier, many experts cried foul that the banks were reaping high profits due to the wide margin between deposit and loan interest rates, at the expense of small and medium-sized enterprises (SMEs) and other borrowers.

The banks attributed their profits to effective cost management and partially net interest.

SCBX said its total operating income rose by 10.8% year on year (YoY) to 171.1 billion baht. Operating expenses increased by 2.7% YoY to 71.8 billion baht, leading to a significant decrease in the cost-to-income ratio at 42%, down from the previous year's 45.2%.

“This reflects our commitment to effective cost management and the ongoing effort to increase operational efficiency,” SCBX said.

SCBX said its non-performing loan (NPL) ratio was 3.4% at the end of 2023, slightly higher than the 3.3% recorded at the end of 2022. The capital adequacy ratio remained strong at 18.8% and the return on equity at the end of 2023 stood at 9.3%.

KBank CEO Kattiya Indaravijaya said the bank and its subsidiaries had reported net profit for 2023 of 42.405 billion baht, an increase of 18.55% over the previous year due to the low base coupled with the gradual recovery of the economy in some areas.

The CEO said KBank’s operating income increased by 19.396 billion baht, or 11.19%, with net interest income of 148.444 billion, an increase of 11.61% according to market conditions. However, net interest income has not deducted various debt management costs and operating expenses and when compared to the earning assets, net interest margin thus stood at 3.66%. In addition, non-interest income increased by 3.950 billion baht, or 9.81%, mainly due to effective management of both domestic and international investment and the increase in revenue from trading and foreign exchange transactions in line with higher business volume that was consistent with the partial recovery of the tourism sector. However, net fees and service income decreased by 5.17% to 1.702 billion baht, mainly due to a decrease in brokerage fees, fees from money transfer and net premiums earned.

Krungsri said the bank and its business units reaped a net profit of 32.93 billion baht for 2023, growing 7.2% YoY.

Krungsri's loan growth for 2023 was at 3.5% driven mainly by domestic commercial loans as well as retail loan expansion. Of contributions from new overseas subsidiaries, SME loan growth was robust at 11.3% to support customers' term loan and working capital requirements in alignment with increased business activities, the company announced.

TTB reported that it earned a net profit of 18.462 billion baht while its NPL ratio reduced further to 2.62%.

TTB CEO Piti Tantakasem said the profits were in line with its business plan to execute merger synergy realisation, which helped support revenue generation and operating cost management.

Meanwhile, CIMB president and CEO Paul Wong Chee Kin said CIMB Thai Group's consolidated operating income increased by 170.9 million baht, up 1.3% YoY to 13.771.6 billion from 2022. Growth in other income contributed 10.5% and growth in net interest income 1.7%, partially offset by a 17.9% decline in net fee and service income.

Its operating income growth was mainly attributed to other operating income growth of 267.9 million baht, up 10.5%, mostly from higher gains on investment and gains on sale of non-performing loans.