KASIKORNBANK (KBank) and its subsidiaries announced a consolidated net profit attributable to equity holders of Baht 13,791 million for the first quarter of 2025. This represents a marginal increase of 1.08% compared to the restated figures from the same period last year, achieved amidst a challenging economic landscape characterized by limited domestic growth, global trade tensions, and persistent household debt issues. The bank maintained prudent management and strong capital levels while navigating pressure on interest income, offset partially by growth in non-interest income streams.
Bangkok, Thailand – The Thai economy demonstrated limited growth momentum during the first quarter of 2025, according to KASIKORNBANK Chief Executive Officer, Ms. Kattiya Indaravijaya. While merchandise exports saw a significant expansion, largely attributed to front-loading activities by businesses anticipating potential US tariff hikes, this surge did not translate into widespread benefits for domestic industrial production or private investment. Ms. Kattiya pointed to underlying structural constraints within the economy, coupled with intense market competition and pervasive uncertainty surrounding US trade policies, as key factors limiting the pass-through effects of export growth.
Looking ahead, the outlook for Thailand’s full-year economic growth in 2025 is projected to be lower than that recorded in 2024. This dimmer forecast stems from multiple pressures. Domestically, the adverse economic consequences of the earthquake experienced in late March are expected to dampen activity in crucial sectors like tourism, real estate, and construction. On the external front, the implementation of US retaliatory trade tariffs on various Thai export products poses a significant challenge. Furthermore, the escalating global trade war, characterized by rising reciprocal tariffs between major economies, injects additional downside risk into both the Thai and global economic outlooks.
Ms. Kattiya noted that while government support measures are in place, their effectiveness in stimulating the broader economy may be limited. Domestic spending remains constrained by the fragile financial conditions of many households, burdened by persistently high levels of debt. This delicate situation hampers the ability of consumers to drive significant economic activity.
In response to this complex and challenging environment, marked by rising economic risks both domestically and globally, alongside overarching concerns about a potential global economic slowdown, KASIKORNBANK and its subsidiaries emphasized their continued commitment to prudent operations. The bank stressed its focus on delivering sustainable value to all stakeholders. This commitment encompasses fulfilling responsibilities towards depositors and investors, providing appropriate and multifaceted assistance to customers – including adherence to responsible lending guidelines – and actively participating in government initiatives designed to help individuals and businesses sustain themselves. Concurrently, the bank remains dedicated to delivering sustainable returns to shareholders through the diligent execution of its K-Strategy 3+1 framework, coupled with a persistent focus on enhancing productivity amidst the prevailing economic uncertainties.
Operationally, KBank‘s performance in the first quarter of 2025, when compared to the restated results of Q1 2024, showed mixed results reflecting the prevailing economic pressures. Net interest income (NII) experienced a decline of Baht 2,761 million, or 7.23%. This decrease was attributed primarily to prevailing interest rate conditions and the bank’s strategic focus on prudently and effectively managing asset quality. Consequently, the net interest margin (NIM) stood at 3.41% for the quarter.
However, the bank saw robust growth in non-interest income, which increased by Baht 1,826 million, a significant jump of 15.39% year-on-year. This positive performance was driven primarily by gains realised from financial instruments measured at fair value through profit or loss (FVTPL), higher investment income, and growth in net fees and service income. Despite this strong showing in non-interest income, the decrease in NII led to an overall reduction in net operating income, which fell by Baht 935 million, or 1.87%, compared to the first quarter of 2024.
On the expense side, other operating expenses remained at a level approximately similar to the same quarter in the previous year. The bank attributed this stability to continuous efforts aimed at improving productivity across its operations. This cost management contributed to a cost-to-income ratio of 40.84% for the quarter.
Consistent with its established practice and in response to the economic climate, KBank and its subsidiaries continued to prudently set aside provisions for expected credit loss (ECL). The ECL charge for Q1 2025 amounted to Baht 9,818 million. The bank stated that this level of provisioning is considered appropriate and adequate to accommodate the uncertainties stemming from both the domestic economy – which is expected to grow more slowly than in the previous year – and the highly volatile global economic environment. The interplay of these income, expense, and provisioning factors resulted in the net profit of Baht 13,791 million.
Comparing the first quarter of 2025 performance to the immediately preceding quarter (Q4 2024, restated), net operating income saw a slight increase of Baht 397 million, or 0.81%. This sequential improvement was primarily driven by gains on FVTPL financial instruments and investment income, which helped offset a decrease in net interest income attributed to prevailing market conditions. A more significant positive trend was observed in operating expenses, which decreased by Baht 2,243 million, or 10.06%, compared to Q4 2024. This reduction was partly due to the seasonal nature of certain marketing expenses incurred in the previous quarter, combined with ongoing effective cost management strategies. Consequently, the operating profit before accounting for expected credit loss and income tax reached Baht 29,051 million, marking a substantial increase of Baht 2,640 million, or 9.99%, from the prior quarter. ECL provisioning continued in line with the bank’s prudent approach.
From a balance sheet perspective, as of March 31, 2025, the total assets of KBank and its subsidiaries stood at Baht 4,355,212 million. This represented a marginal increase of Baht 14,258 million, or 0.33%, compared to the restated total assets reported at the end of December 2024. The primary driver of this asset growth was an increase in net investments, undertaken based on the bank’s expectations regarding market conditions and interest rate trends. Conversely, net loans registered a decrease, a trend consistent with the broader economic slowdown. The bank reiterated its focus on expanding its loan portfolio qualitatively, emphasizing the importance of maintaining asset quality and optimizing risk-adjusted returns in the current climate.
Asset quality metrics reflected this prudent stance. The ratio of gross non-performing loans (NPLs) to total loans stood at 3.19% as of the end of March 2025. Importantly, the NPL coverage ratio, which indicates the extent to which potential losses from NPLs are covered by provisions, increased to 159.49%, suggesting a strengthening buffer against potential credit losses.
KASIKORNBANK FINANCIAL CONGLOMERATE maintained a robust capital position. As of March 31, 2025, its Capital Adequacy Ratio (CAR) calculated according to the Basel III Accord stood at a strong 20.52%, well above regulatory requirements and indicating a solid capacity to absorb potential shocks.
It is also noteworthy that effective January 1, 2025, one of KBank’s subsidiaries adopted the Thai Financial Reporting Standard 17 (TFRS 17) concerning Insurance Contracts. This adoption aligns the subsidiary’s reporting with international standards and impacts the recognition and classification of certain items within the financial statements, aiming to better reflect the entity’s financial value. As required, the consolidated financial statements for 2024 were restated retrospectively to ensure comparability. KBank stated that the adoption of this new financial reporting standard did not have a material impact on the overall consolidated financial statements of the Bank and its subsidiaries.
In conclusion, KASIKORNBANK’s first quarter 2025 results demonstrate resilience in navigating a complex and slowing economic environment. While facing pressure on interest income, the bank managed a slight year-on-year profit increase, supported by non-interest income growth and cost discipline. The continued prudent provisioning, focus on asset quality, and strong capital base position the bank cautiously for the ongoing economic uncertainties projected for the remainder of 2025.
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