Ms. Kattiya Indaravijaya, Chief Executive Officer of KASIKORNBANK, said although Thai economic activity continued to expand in the second quarter of 2023, the recovery remained uneven. This was because tourism receipts recovered only within a certain limit, while the high cost of living and debt burden still pressured household spending. In addition, merchandise exports continued to contract. For the remainder of 2023, although the Thai economy might continue to grow, the overall trend remains fragile, and many factors must be monitored, especially domestic politics, economic policies of the new government, signs of a global economic slowdown, and asset quality issues following the gradual increase in domestic interest rates over the past several months.

Operating performance for the first half of 2023 compared with the first half of 2022,

KBank and its subsidiaries reported net profit of Baht 21,735 Million, a decrease of 1.22% over the same period of 2022. KBank continues to set aside expected credit loss (ECL) under consistently prudent approach in line with continuous proactive asset quality management. One of large corporate customers, which had credit deterioration since the first quarter of 2023 and ECL had already been reserved, were already classified as credit impaired loans in this quarter. With the advance preparation, the Bank's financial status remains strong. ECL in the second quarter remained at a high level, almost the same as the preceding quarter, and ECL in the first half of 2023 increased by 32.77% over the same period of 2022. The Bank had high ECL to readily cope with global economic slowdown and various economic factors that may affect uneven Thailand's economic recovery and some groups of customers that will likely remain on an uneven path. Operating profit before expected credit loss and income tax expense was amounting to Baht 54,004 Million, an increase of 15.73% over the same period of 2022, mainly from the Bank's strategy, the rising interest rate trend resulting in strong net interest income growth and the consistently efficient expense management.

Net interest income increased by 12.25% due to rising interest rates and new loans expansion in line with the Bank's strategic direction. Although there was an increase in the funding cost resulting from an increase in the rate of contribution to Financial Institution Development Fund to its normal level of 0.46%, NIM stood at 3.54%. Non-interest income increased by 25.64% mainly due to the increase in mark to market of financial instruments measured at fair value through profit or loss according to market condition. However, other operating expenses increased by 14.61%, in line with an increase in operating income, which were driven by business activities and partly from an increase in employee expenses from one-time cost of living subsidy measures. As a result, cost to income ratio stood at 42.94% that was an approximate to the same period of 2022.

Operating performance for the second quarter of 2023 compared with the first quarter of 2023,

KBank and its subsidiaries reported net profit of Baht 10,994 Million, an increase of 2.36% compared with the first quarter of 2023. Operating profit before expected credit loss and income tax expense amounting to Baht 27,223 Million that was an approximate to the preceding quarter. Operating income increased mainly due to an increase in net interest income. Other operating expenses increased from customer service expenses. As a result, cost to income ratio stood at 43.37%, almost the same as the preceding quarter that stood at 42.50%.

As of 30 June 2023, KBank and its subsidiaries' total assets were Baht 4,268,100 Million, an increase of Baht 21,731 Million or 0.51% over the end of 2022. The majority came from an increase in net interbank and money market and net investments, while net loans decreased mainly due to non-performing loans management such as debt restructuring, sale of loans, written-off loans, etc. However, new loans continued to grow in line with the Bank's business direction. NPL gross to total loans stood at 3.20% and coverage ratio stood at 147.31%. In addition, as of 30 June 2023, KASIKORNBANK FINANCIAL CONGLOMERATE's Capital Adequacy Ratio (CAR) according to the Basel III Accord remain strong at 19.01%, with a Tier 1 Capital ratio of 17.04%.