Ms. Kattiya Indaravijaya, Chief Executive Officer of KASIKORNBANK, said the COVID-19 outbreak and the tighter containment measures in many areas further impacted the Thai economy in the third quarter of 2021. Domestic economic activity was partially interrupted, while export growth slowed amid the resurgence of COVID-19 cases overseas. However, the Thai economy is likely to recover in the final quarter of the year, helped by the rollout of vaccines, the relaxation of the related control measures, and government support measures.
Operating performance for the nine-month period of 2021, KBank and its subsidiaries reported net profit of Baht 28,151 Million, and reported net profit of Baht 8,631 Million, for the third quarter of 2021.
Operating performance for the nine-month period of 2021 compared with the nine-month period of 2020
KBank and its subsidiaries reported net profit of Baht 28,151 Million, an increase of Baht 11,922 Million or 73.47% over the same period of 2020, mainly due to KBank and its subsidiaries set aside lower expected credit loss from the preceding period by 28.28%. For the nine-month period of 2020, KBank and its subsidiaries set aside high level of expected credit loss amounting to Baht 42,879 Million under prudent approach to support uncertainties of economic recession from the COVID-19 pandemic that has never happened before together with potential effect from measures of the government and competent agencies urging financial institutions to provide assistance to customers that the Bank has closely monitored asset quality. Although the Thai economy in the nine-month period of 2021 was affected by the new spread of COVID-19 pandemic and the tighter containment measures in many areas, KBank and its subsidiaries closely assess and prepare to support uncertainties of economic slowdown and still continuously support customers through various measures comprising loans to bolster liquidity for customers. Thus, KBank and its subsidiaries consider to set aside expected credit loss in the nine-month period of 2021 amounting to Baht 30,752 Million, which consistently conform with prudent approach.
Operating profit before expected credit loss and income tax expense for the nine-month period of 2021 of Baht 70,259 Million increased by Baht 4,003 Million or 6.04% over the same period of 2020. Net interest income increased by Baht 6,171 Million or 7.49% in line with growth of lending despite loans interest rate cut to reduce the customers' debt burdens. Loan growth by 8.87% over last year mainly came from the customers with potential and the Bank's relief measures to inject liquidity for customers so that they could resume normal business operations. The Bank has closely monitored asset quality in order to provide ongoing assistance to customers. Moreover, there are still some customers under the Bank's relief measures covering moratorium on principal and interest payments that the Bank has to manage increasing accrued interest. For interest expenses, the decrease resulted from appropriate and efficient financial cost management, resulting in NIM that stood at 3.21%, while non - interest income decreased by Baht 1,326 Million or 3.95%, mainly due to the mark to market of financial assets according to market condition and decrease in net premiums earned - net. Although fees and service income - net increased by Baht 1,864 Million or 7.55%, mainly due to fees from fund management and brokerage fees. Other operating expenses increased by Baht 842 Million or 1.69% due to employee expenses and expense from KBank campaign to support customers during the containment measures period. Cost to income ratio stood at 41.85%.
Operating performance for the third quarter of 2021 compared with the second quarter of 2021,
KBank and its subsidiaries reported net profit of Baht 8,631 Million, a decrease of Baht 263 Million or 2.96% over the previous quarter. Net interest income increased by Baht 1,024 Million or 3.45% mainly from loans growth. NIM stood at 3.23%, while non - interest income decreased by Baht 1,936 Million or 17.38% mainly due to mark to market of financial assets according to market condition. Other operating expenses slightly decreased by Baht 104 Million or 0.61% due to expense management during economic slowdown. Cost to income ratio stood at 42.47%. Moreover, KBank and its subsidiaries set aside higher expected credit loss by Baht 489 Million or 4.53% from the previous quarter.
As of 30 September 2021, KBank and its subsidiaries' total assets were Baht 4,029,831 Million, an increase of Baht 371,033 Million or 10.14% over the end of 2020. The majority came from loans growth and an increase in investments - net. As of 30 September 2021, NPL gross to total loans stood at 3.85%, while at the end of 2020 this stood at 3.93%. The Bank has closely monitored and assured credit quality for customers affected by COVID-19. Coverage ratio as of 30 September 2021 stood at 156.96%, while at the end of 2020 this stood at 149.19%. In addition, as of 30 September 2021, KASIKORNBANK FINANCIAL CONGLOMERATE's Capital Adequacy Ratio (CAR) according to the Basel III Accord was 18.82%, with a Tier-1 Capital ratio of 16.53%.