Since the beginning of the year the Thai economy has been expanding at a slower pace as Thailand has been experiencing a new wave of Covid-19 infections and tighter restrictions on economic activities in some parts of the country. However, Thailand's exports have continued to recover in line with global economic outlook on the back of rapid vaccination rollout and continuing policy stimulus, especially in advanced economies. Thailand continues to face challenges in the tourism sector given the uncertainty over the timing of border reopening in the second half of 2021. In the coming quarters, the Thai economic outlook will depend on how well it is able to contain the pandemic, as well as the effectiveness of the vaccination rollout. Moreover, the government's nationwide cash handouts should partially support household spending in the coming months.
The Thai economy will take some time to recover from the effects of the Covid-19 pandemic and the recovery in each economic sector will occur at a different pace. The government and the Bank of Thailand have continuously introduced various measures to support businesses and people dealing with different issues, help business operators adjust to the post Covid-19 new normal, and assist Thailand's economic recovery. The Bank understands the current challenging situation that businesses and customers are facing and continues to support its customers and provide them with appropriate assistance. Moreover, the Bank has also placed importance on prudent risk management while maintaining strong financial stability, liquidity and capital positions.
Bangkok Bank and its subsidiaries delivered first quarter net profit of Baht 6,923 million
The Bank and its subsidiaries reported a net profit of Baht 6,923 million, increased by Baht 4,525 million from the last quarter of 2020. Net interest income increased by 2.3 percent due to funding cost management. The net interest margin stood at 2.17 percent. Net fees and service income rose by 15.4 percent mainly from higher fee income from mutual funds and bancassurance, and securities business. Operating expenses decreased, resulting in a cost to income ratio of 51.1 percent. The level of expected credit losses was set at Baht 6,326 million in line with the Bank's continuous prudent management.
Bangkok Bank continues to maintain a healthy financial position, as well as high liquidity and capital positions, under its prudent management approach to supporting Thailand's economic recovery during uncertain times
At the end of March 2021, the Bank's total loans amounted to Baht 2,369,276 million, same level as at the end of 2020. The non-performing loan (NPL) ratio was 3.7 percent, slightly declined from the end of December 2020. The Bank continues to closely control of credit underwriting and risk management. The ratio of loan loss reserves to non-performing loans was 187.3 percent.
In terms of liquidity, as of March 31, 2021, the Bank's deposits amounted to Baht 2,904,276 million, an increase of 3.3 percent from the end of December 2020, from all types of deposits. The loan to deposit ratio was 81.6 percent, reflecting adequate liquidity to cushion against economic uncertainties.
In terms of capital, as of March 31, 2021, the Bank's total capital adequacy ratio, Tier 1 capital adequacy ratio and Common Equity Tier 1 capital adequacy ratio of the Bank and its subsidiaries were 18.4 percent, 15.9 percent and 15.1 percent respectively, comfortably above the Bank of Thailand's minimum capital requirements.