Income composition:General information: KASIKORNBANK PUBLIC COMPANY LIMITED is a registered public company located in the Kingdom of Thailand and listed on the Stock Exchange of Thailand on 9 February 1976. The principal activity of the Bank is commercial banking and the Bank conducts its businesses through a network of branches covering all parts of Thailand and certain major parts of the world. Kasikornbank Public Company Limited. The Group's principal activities are carried out through three divisions: Corporate Business Group: Responsible for overseeing customer and SME customers. The main products include loans, trade finance, cash management services, foreign exchange rate, and corporate finance and securities services. Retail Business Group: Responsible for supervising customer relationships with retail business and individual customers. It also manages related sales channels and provides services to customers through direct a direct sales team, a call center and other electronic channels. Products include retail business loans, consumer loans and credit cards.
Treasury Group: Responsible for managing the assets and liabilities of the bank, including trading securities, foreign exchange and derivatives.
The major income composition for Kasikorn Bank including interest income in consist of interest on loan (13,141million baht), interbank and money market items (672 million baht),finance lease (608 million baht), investment (1,086 million baht) and non-interest income in consist of gain on investment (175 million baht), share of profit from investments on equity method (5 million baht), acceptance, aval, guarantee(317 million baht), other fee and service income (3,910 million baht), gain on exchange (1,128 million baht), other non-interest income (133 million baht) in the first quarter of 2009.
Blow mentioned graph is the detail information about loan and investment income:Consolidated (Million Baht )31 Mar 0931 Dec 0830 Sep 0830 Jun 0831 Mar 08Loans, Accrued interest receivables and Allowance for doubtful accountsWritten off loans1,5271,1871,1851,150740Restructured loans71,59867,01260,66956,26452,847Non- performing loans net (NPL net) 17,14815,71218,40118,44520,903Total loans used for NPL net ratio calculation926,7311,072,371901,940856,634869,369NPL net to total loans (%)1.851.472.042.152.40Non-performing loans gross (NPL gross) 34,92933,68637,26436,52739,641Total loans used for NPL gross ratio calculation 944,5111,090,345920,803874,716888,107NPL gross to total loans (%)3.703.094.054.184.46Classified loans>> Pass803,745829,220806,016788,334739,171>> Special mention39,04941,23129,01519,55221,031>> Sub standard8,7075,8914,4055,7468,646>> Doubtful5,5525,79010,4579,88411,210>> Doubtful of loss20,78722,17722,62021,07819,995Total877,840904,309872,513844,594800,053Credit balance transaction7621,1857329491,082Total878,602905,494873,245845,543801,135Allowance for doubtful accounts30,59729,77228,75227,82726,992Allowance as required by BOT23,15123,36925,29124,46523,457Allowance to allowance as required by BOT (%)132.16127.40113.68113.74115.07InvestmentsDebt Instruments185,52499,489116,117110,044127,347Government and state enterprise securities>> Trading investments4,6576,15615,9542,4918,325>> Available-for-sale investments168,90478,90684,58491,57595,678>> Held-to-maturity investments4,7066,8367,0997,1667,706Private enterprise debt instruments>> Trading investments7181,6502,804219999>> Available-for-sale investments1,2181,212764951976>> Held-to-maturity investments820841841862862Foreign debt instruments>> Available-for-sale investments4,3912,9062,8796,67912,549>> Held-to-maturity investments1109821,192101252Equity Securities3,3023,4563,3003,5283,631>> Trading investments288368311258335>> Available-for-sale investments762756570886960>> General investments2,1082,1182,2202,1922,181>>Investment in subsidiaries & associated companies144214199192155Total investment-net188,826102,945119,417113,572130,978As we can see clearly from Kasikorn BankÃÂs income statement, its income typically is divided into two groups which are 15,510,327 thousand baht in interest & dividend income and 5,671,331 thousand baht for total non-interest income which is one third of its interest income. So bankÃÂs income is more rely on interest income.
Strategy:Ratios31 March 200931 December 2008ROA: net income/aTA1.2056%1.5811%ROE13.1436%17.1132%interest income/aTA4.9211%4.9587%Non-interest income/aTA1.7994%2.0524%Non-interest exp/aTA2.7286%2.7350%Non-int income/non-int exp0.6594706660.750434273EM: aTA/aTE10.9021501710.82341856EB: earning assets/aTA0.880523321.046529713Net interest margin3.0252%2.8405%efficiency ratio61.1349%54.4266%burden 2,928,492 1,915,823burden/aTA0.9292%0.6826%operating risk ratio144503954.9133329858.9As you can see from above ratio clearly, the bank got less return on its total assets in the first quarter in 2009.
Interest income from loans surge by Baht 1160 Million as a result of a increase of the bankÃÂs lending rates and higher loan volume during the period. Interest expenses from deposit increased by Baht 1056 Million as a result of a raise in interest rates and higher deposit balance during the period. Gain on investments, drop from the preceding quarter by Baht 603 Million or 77.80%, due to gain from sales of debt securities in the preceding quarter during a favorable market condition. Fees and service income drop from the preceding quarter by Baht 339 Million or 8.71%. The majority of the decrease came from lower fees and service income from loans as a result of the current economy. Total non-interest expenses, decreased from the preceding quarter by Baht 89 Million due mainly to higher promotion and public relation expenses in the preceding quarter. Such expenditures and other expenses are normally lower in the first quarter.
The interest income of this bank is much more than non-interest income, both of them decrease in the first quarter. The interest income not change very large, but the non-interest shows a large decrease by 0.253 percentage or Baht 803 Million.
And as the global financial crisis, both interest and non-interest incomes to average total assets are decreasing from last year first quarter. But non-interest income drop faster than interest income, it may result by the financial market, people they lose the confidence and interest for financial institutions and financial service. That leads to less people to take action in financial market and thatÃÂs also way banks liability was decreased from last period to this season.
Also, the control of expense of the bank in the first quarter is not good as last period. Although the non-interest expense of total assets is better, both efficiency ratio and operating risk ratio increasing tells us that the expense in this period is much higher, so in this period K bank was not well done the control in both interest and non-interest income composition. This may because of the increasing number of branch open in the market.
Because of the decrease of the income and increase of expense, the net income of this period has a 0.3755 percentage decrease in ROA.
In 2009, K bankÃÂs strategy and movement.
The bank is going to increase non-interest income in order to change the situation of grown heavily and update its business operation management.
KBank issued ÃÂK-My Debit CardÃÂ, which is ThailandÃÂs first debit card service that allows customers to personalize their own debit cards.
Since its inception, the Bank has grown healthily. As of March 31, 2009, the Bank, with registered capital of Baht 30,486 Million, had total assets of Baht 1,217,861 Million, total deposits of Baht 914,106 Million, and total loans of Baht 877,141 Million. The Bank operates 689 branches across the country, comprising 232 Bangkok Metropolitan branches and 457 upcountry branches. The Bank has seven overseas offices, including the Los Angeles International Branch, Hong Kong Branch, Cayman Islands Branch, Shenzhen Branch and the Representative Offices in Beijing, Shanghai and Kunming, which greatly facilitate international trade and financial service transactions between Thailand and our trade partners worldwide.