Bangkok--20 Apr--KBank
Dr. Prasarn Trairatvorakul, President of KASIKORNBANK, announced the fourth largest bank and its subsidiaries recorded 3.877 billion baht in net profits in Q1 2007. The bottom line was slightly higher than market expectations, reflecting the effectiveness of the Bank’s clearly-defined customer-centric strategy. “KBank continues to satisfy its seven customer segments through its quality services and full spectrum of products from KASIKORNBANKGROUP, making our latest quarterly results exceed market expectations”, Dr. Prasarn stated.
Compared with the first quarter of 2006, KBank and its subsidiaries’ net interest and dividend income in the first quarter of 2007 improved to 8.823 billion baht or 4.77% growth. Non-interest income moved in parallel, improving by 35.53% from 3.104 billion baht to 4.207 billion baht. Fee income rose by 20.98% compared with Q1 2006. As expected, the drops in both deposit and lending rates led to a slight fall in net interest margin to 3.97% compared with 4.05% in Q4 2006.
Operating expenses remained low in Q1 2007 at 6.497 billion baht but were higher than the same period in 2006. “Our strategic K-transformation and Channel Expansion projects are on track. While the cost to income ratio is 49.86% in Q1 2007, the ratio will gradually increase in the later quarters of this year due to disbursements for these projects”, Dr. Prasarn added.
Moderate loan growth at 1.12% year-to-date shows the Bank is treading cautiously, making 1.025 billion baht in provisions at the Bank level. “When the economy slows, we must grow sensibly and pay attention to asset quality”, Dr. Prasarn asserted.
KBank and its subsidiaries’ gross NPLs increased from 6.84% to 7.14% in Q1 2007. “In part, an increase in gross NPLs illuminates KBank’s more rapid, conclusive approach to restructure lingering bad debts. But, higher gross NPLs are also due to an increase in new NPLs. The increase mirrors prevailing market conditions in a slowing economy. This clearly justifies our cautious approach to asset expansion”, stated KBank’s President.