The local banking sector recorded improved net profit for the first half year-on-year, attributed to higher interest income.
The positive results are expected to continue in the second half this year, supported by anticipated loan growth thanks to the economic recovery trend.
The 10 SET-listed commercial banks announced combined net profit for the first half of 2022 at 106 billion baht, up 8.07% year-on-year, supported by their rising interest income, despite a decline in non-interest income.
Analysts forecast interest income for the banking industry should continue to improve in the second half, in line with an economic recovery and supporting loan demand, particularly corporate loan demand.
The upward trend of interest rates should also result in a higher net interest income (NIM) for the banking sector.
SCB X upgraded its NIM expectation for 2022 to 3.1-3.2% from 2.9-3% after exceeding its expectations by booking 3.13% in the first half, while maintaining its existing loan growth target in the range of 3-5%.
However, the company lowered its non-interest income projection from low single-digit growth to the low teens, said Manop Sagiambut, chief financial officer at Siam Commercial Bank, a subsidiary of SCB X.
He said the company doesn't expect its non-performing loan (NPL) ratio to exceed 3.6% at the end of 2022.
SCB X reported growth of consolidated net profit of 6.3% year-on-year to 20.1 billion baht for the first half of 2022.
Chief executive Arthid Nanthawithaya said SCB X always takes a prudent approach to management, causing it to raise provisions to enhance balance sheet strength and add an extra cushion against volatility from external factors and inflation headwinds.
Kasikornbank (KBank) and its subsidiaries reported net profit of around 22 billion baht for the first half of 2022, up 12.7% over the same period of 2021.
The increase is mainly due to higher net interest income of 10.2% from loans to customers as new lending grew.
According to KBank, the Thai economy continued to grow in the second quarter of 2022. Private consumption, investment and exports increased, while there are positive signs in the tourism sector.
However, industrial production remained subdued amid elevated production and energy costs, as well as multiple shortages of parts.
Looking at the remainder of this year, the Thai economy will continue to grow, but soaring inflation should be closely monitored as it may affect household spending, while the Thai policy rate could start an upward trend, said KBank.
KBank and its subsidiaries made a strategic move to use new technology and processes, including commercial partnerships to improve access to banking services across a broader range of consumers, according to the bank.
Bank of Ayudhya (Krungsri) reported consolidated and normalised net profit of 15.3 billion baht for the first half of 2022, an increase of 18.6% year-on-year, driven mainly by lower than expected credit losses and higher net interest income.
Incorporating an extraordinary gain on investments from the sale of shares in Ngern Tid Lor Plc (TIDLOR) in the first half of last year, Krungsri's net profit dropped by 27.5% for the first half of 2022.
According to Seiichiro Akita, president of Krungsri, amid the uncertainty and volatility of global economic and financial markets, the Thai economy is expected to face downside risks in the second half of 2022, even though domestic economic activity and the tourism sector could benefit from the lifting of Covid-19 containment measures and international travel restrictions.
With headline inflation remaining elevated, monetary normalisation could result in gradual hikes of policy interest rates, commencing in the third quarter of this year. Krungsri maintains its loan growth outlook at the upper end of the target range of 3-5% based on an economic growth forecast of 3.1% for the year, he said.
Tisco Financial Group posted a net profit for the first half of 2022 of 3.64 billion baht, an increase of 6.2% year-on-year, mainly attributed to growth in consumer loans.
According to group chief executive Sakchai Peechapat, the group will continue to focus on quality growth in the second half of the year.
