Ms. Kattiya Indaravijaya, Chief Executive Officer of KASIKORNBANK, said in the first quarter of 2025, the Thai economy exhibited limited growth. Although merchandise exports expanded significantly due to front-loading ahead of US tariff increases, industrial production and private investment did not fully benefit from such export growth, owing to structural constraints, intense competition, and ongoing uncertainty surrounding the US trade policy. For the full-year 2025, Thailand’s economic growth is projected to be lower than in 2024. This outlook reflects not only the adverse effects of the late-March earthquake on the tourism, real estate, and construction sectors, but also the impact of US retaliatory trade tariffs on various Thai export products. In addition, the escalation of the trade war, marked by rising reciprocal tariffs, adds further downside risk to the global economic outlook. While the government measures may only partially support the economy, their effectiveness remains limited, as domestic spending continues to be hindered by fragile financial conditions and persistently high debts of households.
Amidst a range of challenges stemming from risk rising economic factors both domestically and globally, as well as concerns regarding the global economic slowdown, the Bank and its subsidiaries continue to operate with prudence and remains committed to deliver sustainable value to all stakeholders, includes fulfilling responsibilities towards depositors, investors, and providing appropriate assistance to customers in various aspects, including responsible lending guidelines, participation in government initiatives to support customers in sustaining their lives and businesses along with committing to deliver sustainable returns to shareholders through the execution of K-Strategy 3+1 and continuous focus on productivity improvement within a highly uncertain economic environment.
Since 1 January 2025, one of the Bank's subsidiaries has adopted TFRS 17: Insurance Contracts, in alignment with international standard. This adoption impacts the recognition and classification of items in the financial statements to better reflect the financial value of the entity. The consolidated financial statements for 2024 have been restated retrospectively for comparative purposes. The adoption of this financial reporting standard does not have a material impact on the consolidated financial statements of the Bank and its subsidiaries.
Operating performance for the first quarter of 2025 compared with the restated performance for the same quarter of the previous year, the Bank and its subsidiaries reported a decrease in net interest income of Baht 2,761 million or 7.23% due to the pressure from interest rate conditions and the focus prudently and effectively manage assets quality. As a result, net interest margin ratio stood at 3.41%. Despite an increase in non - interest income by Baht 1,826 million or 15.39%, driven by gains from financial instrument measured at fair value through profit or loss, investment income, and net fees and service income. However net operating income decreased by Baht 935 million or 1.87%. Other operating expenses were an approximate level to the same quarter of the previous year, reflecting continuous productivity improvement, resulting in a cost to income ratio of 40.84%. As consistently practiced, the Bank and its subsidiaries continue to prudently set aside expected credit loss (ECL) which was Baht 9,818 million. ECL was at an appropriate and adequate level to accommodate the uncertainties of the domestic economy, which is expected to grow at a lower rate than the previous year, and the highly volatile global economy. As a result, net profit attributable to equity holders of the Bank was Baht 13,791 million, a slight increase of 1.08% compared with the same quarter of the previous year.
Operating performance for the first quarter of 2025 compared with the restated performance for the fourth quarter of 2024, net operating income of the Bank and its subsidiaries slightly increased by Baht 397 million or 0.81%, primarily due to gains on financial instrument measured at fair value through profit or loss and investment income, despite a decrease in net interest income due to market conditions. Additionally, other operating expenses decreased by Baht 2,243 million or 10.06%, partly due to seasonal marketing expenses and continuous effective cost management. Consequently, the Bank and its subsidiaries reported operating profit before expected credit loss and income tax of Baht 29,051 million, an increase of Baht 2,640 million or 9.99%. Furthermore, ECL was setting aside in alignment with the ongoing prudent approach.
As of 31 March 2025, the Bank and its subsidiaries’ total assets were Baht 4,355,212 million, a slight increase of Baht 14,258 million or 0.33% compared with the restated total assets as of 31 December 2024. Most of an increase came from net investments which was investment based on expectation of market conditions and interest rate trend. However, net loans decreased in line with economic slowdown. The Bank remains focused on quality loans expansion, emphasizing asset quality and optimizing risk-adjusted returns. NPL gross to total loans stood at 3.19% and coverage ratio increased to 159.49%. As of 31 March 2025, KASIKORNBANK FINANCIAL CONGLOMERATE’s capital adequacy Ratio (CAR) according to the Basel III Accord remained strong at 20.52%.