The Bank of Commerce Group’s profit in the fourth quarter declined as expected, with the five large commercial banks having a total net profit of 113,654 million baht, a decrease of 63,356 million baht or a 35.79% decrease, while the remaining 5 had a total net profit of 24,644 million baht. Down to 1,067 million baht or down 4.14%, resulting in the entire group collapse nearly 32% as a result of the reserve burden and the COVID-19 outbreak. Despite improvements in the initiation of vaccination against COVID-19
From the coronavirus outbreak (COVID-19) in 2020, it has had a wide impact on the economy. And in almost all business sectors it is difficult to avoid … Commercial banks are also one of those businesses that are quite affected. Both from technology Disruption that continued to affect since the previous year And which is reflected in the operating results from the second quarter onwards until the summary of the operating results for the year 2020, which will give a clearer picture and trend of the business this year. (See the accompanying table)
Revenue shrink – accelerate reserve.
For the performance of 10 commercial banks, the net profit decreased, consisting of Bangkok Bank (BBL), Krung Thai Bank (KTB), Kasikorn Bank (KBANK), Siam Commercial Bank (SCB), Bank of Ayudhya (BAY), Bank. TMB (TMB), TISCO Bank (TISCO), Kiatnakin Bank (KKP), CIMB Thai Bank (CIMBT) and Land and Houses Bank (LHFG) for the year 2020 totaling 138,298 million baht. Decreased by Baht 64,423 million or 31.78% compared to the end of 2019, with 5 large commercial banks having gross profit 113,654 million baht, a decrease of 63,356 million baht Or representing a reduction of 35.79%, the remaining 5 has a total net profit of 24,644 million baht, a decrease of 1,067 million baht or a decrease of 4.14%.
The decrease in net profit was mainly due to lower income following the economic slowdown. Especially fee income Plus, the rising costs were mainly due to higher than normal provisions for doubtful debts after the COVID-19 epidemic earlier this year. As a result, commercial banks have to issue loan-principal measures to customers and entrepreneurs who are affected by the lock down.
Which in large commercial banks Bangkok Bank (BBL) recorded the highest net profit margin of 52.03%, mainly due to the expected credit loss provisioning expenses of 31,196 million baht, resulting in the credit loss allowance to Loans with credit impairment, at 181.6%, are an ongoing precautionary approach. To accommodate the uncertainty of the economic conditions that shrink from the epidemic of COVID-19. While net fees and service income and other operating income declined. This was mainly due to fees from credit granting and income from investments. From the introduction of the new Financial Instruments Standard (No. 9) to the financial statements for the accounting period from January 1, 2020.
Krung Thai Bank (KTB) reported a net profit of 16,731 million baht, a decrease of 12,553 million baht or a decrease of 42.87%, with the bank gradually setting aside the expected high credit loss of 44,903 million baht, an increase of 88.6. % Compared to bad debt expenses Doubtful debt in 2019 by carefully considering the constantly changing business environment The economic slowdown and high uncertainty that may affect credit quality or NPLs Cliff, which the Bank has continued to help customers in the past. As a result, the Coverage Ratio as of December 31, 2020 increased to 147.3% from 131.8% as of December 31, 2019, together with the Bank’s asset quality management, with NPLs Ratio-Gross of 3.81%, a decrease from 4.33% as of 31 December 2019.
Mr. Phayong Srivanich, President Krung Thai Bank said that in 2020 it faces challenges in business operations and the economic conditions that have not yet returned to normal due to the COVID-19 outbreak, however, the Bank has cooperated with the government to take action. Measures In addition, the Bank has continually provided assistance to affected customers in conducting their businesses in order to quickly adapt their business under new normal conditions. At the same time, the Bank has developed new digital financial products. Providing services for the development of Innovation & Digital Platform to enter the full range of Open Banking, Virtual Digital Banking Service, as well as New Business Model through Infinitas by Krungthai Company Limited (Infinitas by Krungthai) established in the month. October 2020
Siam Commercial Bank (SCB) has a net profit of 27,217 million baht, a decrease of 13,219 million baht or equivalent to a decrease. 32.69% in 2020, the bank has set aside 46,649 million baht, a 29% increase from the previous year to strengthen and prepare for the economic situation of the COVID-19 epidemic. The NPL ratio at the end of 2020 was 3.68%, up from 3.41% a year ago, mainly due to qualitative debtor classification among customers severely impacted by the COVID-19 epidemic. The bank’s allowance for doubtful accounts to NPLs remained high at 141%, while the bank’s legal capital remained strong at 18.2%.
While Kasikorn Bank (KBANK) reported profit at 29,487 million baht, a decrease of 9,239 million baht or 23.86% compared to the previous year. This was mainly due to the continued conscientiousness of the Bank in consideration. Expected credit loss (ECL) provision increased from the previous year by 9,536 million baht or 28.04%, which is the provision of provision since the first half of the year totaling 32,064 million baht and includes The reserve in 2020 amounted to 43,548 million baht, which is a level that can accommodate any damages that may occur appropriately. And in accordance with the situation that arises And the expected credit loss allowance ratio (Coverage ratio) as of December 31, 2020 at 149.19%.
“Providing high provisions to meet the high uncertainty of the COVID-19 epidemic situation.” That have severe impacts both at home and abroad This is a crisis that has never happened in this way before. Including the potential impact from the measures taken by financial institutions to assist customers, however, in the second half of the year when customer assistance measures were gradually ended, Customers can also pay on installments better than expected. Also at the end of Q4, there was an epidemic of COVID-19. A new wave follows The Bank has reviewed the adequacy of reserves. Found that the reserve The past three quarters are already at a sufficient level. The Bank therefore considered setting aside provisions in the fourth quarter at a lower level compared to the third quarter of the year. But overall it is a level that is appropriate for the situation. “ Ms. Khattiya Indarawichai Chief Executive Officer Kasikorn Bank (KBANK) said.
Year 64 still at high risk – focus on supporting customers
Mr. Seiichiro Akita, President and Chief Executive Officer Bank of Ayudhya (BAY) said that Krungsri believes that the recovery of the Thai economy will take at least two years before it returns to pre-epidemic conditions. In addition, Krungsri Research Center The Thai economy is forecast to expand 2.5% in 2021 from a low base, which shrank 6.4% in 2020, and the recovery is expected to be different for different businesses and industries in 2021. As a systematic commercial bank (D-SIB) coupled with financial strength. Krungsri will continue to pursue its prudent risk management policy. And take proactive assistance measures To assist industries and customer groups affected Along with fully supporting the economic recovery of Thailand
Ms. Khattiya Indarawichai Chief Executive Officer Kasikorn Bank (KBANK) said that in 2021, the Thai economy still faces many risk factors. In particular, the new wave of COVID-19 outbreaks, which makes it assess that The path of economic recovery remains uncertain. And most of the support came from government spending and investment.
Piti Tantakasem, Chief Executive Officer of TMB, said that the provisioning increased in 2020 resulted in the Against bad debt, which is like a risk-taking buffer, has increased to 134% compared to 120% in 2019, which is considered prudent risk management and preparation in advance to support the future bad debt trend after the moratorium is over. By the end of 2020, loans under the bank’s moratorium fell from around 40% at the start of the program. Coming to around 15% of the total loan, most are customers who come in for additional assistance after the first program is over. And with financial strengthening preparations in 2020, the bank is well prepared to tackle 2021 and is ready to help customers affected by the new outbreak. The bank consolidation is expected to be completed as planned by July.
Mr. Athit Nantawitaya Chief Executive Officer and Chairman of Executive Committee Siam Commercial Bank said that although net profit last year was pressured by higher provisioning. But results from the Bank’s core businesses remain strong and the Bank’s capital fund remains high. Since the start of the COVID-19 epidemic The Bank provides assistance to customers through various financial assistance programs. More than a million people have gone. In the second half of the year Assisted customers have gradually left the program, leading to a significant decline in the loan amount under the Financial Aid Scheme, with the end of 2020 totaling approximately $ 402 billion, or 18% of the bank’s total loan balance. For the year 2021, the COVID-19 epidemic The new round in the country makes the direction of Thailand’s economic recovery still highly uncertain. Despite improvements in the initiation of vaccination against COVID-19
Therefore, the bank will continue to strive to help affected customers to get through this difficult time. The Bank continues to strive to transform its business model through technology-driven business development. Expanding revenue base from the banking and wealth management business And transforming the organization into the digital age to its full potential
While Bangkok Bank views that The future economic recovery remains highly uncertain. Both from the risk of a new coronavirus outbreak Epidemic control measures Effectiveness and distribution of COVID-19 vaccine Including a period of re-exposure to foreign tourists Therefore, the bank continues to monitor the situation and take care of customers closely. Including the importance of overseeing the credit management process and managing risks with caution and prudence. Along with maintaining a strong financial, liquidity and capital status.
Mr. Suthat Ruangmanamongkol TISCO Group Chief Executive Officer said that the Thai economy in 2021 is likely to recover slightly positive at 2.0%, which is a very low rate of recovery from the previous year. Admittedly, the new coronavirus outbreak has worsened financial vulnerability, liquidity and customer debt servicing capability. What we can do is to help customers and monitor them closely.
While the other side continues to expand the business growth in accordance with the risk In the retail finance business, digital platforms have been developed to help make work easier. And can also build a good relationship with both partners and customers As well as the development of an ecosystem (Ecosystem) of car loan users Motorcycle And home loan This will better create opportunities for the Bank’s business expansion. Business customers will continue to use the strength of Total Solution service, covering credit products and investment banking services. That will truly help meet the needs of customers
I believe every bank can pay dividends in the year 63. – Growth results.
Mr. Therdsak Thawee Theeratham, Deputy Director of Research Division, Asia Plus Securities Co., Ltd. or ASPS, said that 8 Thai commercial banks assessed Found that all banks will pay dividends for the year 2020 anywhere and look at the overall profit of the banking group in 2021, it is expected to recover approximately 12% from 2020 to a level of 1.4 billion baht after the pressure from provisioning. Will decrease Because various banks Has increased the provision of provisions in the past year to hedge risks. As a result, the average coverage ratio to non-performing loans (Coverage ratio) of the banking group remained at a high 150-160% and the minimum BIS ratio was 11-12%. Commercial bank That still has the ability to handle risks
Maybank Kim Eng Securities (Thailand) or Maybank Securities Assessment of the Bank Group’s performance will grow 13-14% this year and next year. Due to lower loan costs and higher fee income growth. This will boost ROE to 6.5-7.0% in 2021-2022 from 5.8% in 2020 Maybank Securities expects the bank’s operating results and results to gradually increase. This has improved since the second half of 2021 as NIM and loan costs will be the lowest in the first half of 2021. Stock price weakness during this period is an accumulation opportunity.