Manufacturing, household spending weigh on KBank’s Q2 net profits

Net profit for the quarter is 6.18% lower than in Q1.

Thailand’s Kasikornabnk reported a net profit of THB26.14b for the first six months of 2024.

Net profit in Q2 was THB12.65b, 6.18% lower compared to Q1, which the bank blamed on lower net interest income and net fees and service income. 

KBank CEO Kattiya Indaravijaya noted signs of “slow and uneven recovery” in Thai economic activity in the second quarter of 2024.

“Manufacturing production and household spending were challenged by production costs, debt budends, and incomes that have not yet fully recovered,” Indaravijaya said in the bank’s latest financial statement.

Net fees and service income was 2.66% lower at THB221m for Q2 as a result of lower fees from KBank’s card business and other fees.

Other operating expenses rose by 5.67% to THB21.88b in Q2 on the back of increased marketing activities, IT-related expenses on expansion of customer service channels, and a one-time employee subsidy measure.

Non-performance loans (NPL) gross to total loans was 3.18% in Q2, slightly lower compared with Q1.

Cost to income ratio for Q2 is 43.4%. For H1, the cost to income ratio is 42.35%, a decline from H1 2023.

As of 30 June, KBank and its subsidiaries have total assets at THB4.24b, 0.84% lower than at the end-June 2023. 

For the second half of 2024, KBank and CEO Indaravijaya expects Thai economic recovery to “stay on track” due to the acceleration of budget disbursement and exports. 

“However, business sector impacts from rising costs, following increases in energy and minimum wage costs, must be monitored together with any clarification of details of the government’s economic stimulus measures for the remainder of 2024,” KBank warned.