Kasikornbank
It has been a tough year for Thailand’s leading commercial banks. A combination of sluggish loan growth, the high cost of rolling out digital platforms and continuing credit problems – especially for small and medium-sized enterprises – led three of the big four banks to report lower profits for 2017.
Against that less-than-favourable backdrop, most analysts had little difficulty in picking the standout winner. Despite its well-known problems with SMEs, Kasikornbank, led by chief executive Banthoon Lamsam, continues to benefit from its proven management team, its network of 1,032 branches built up over 70 years, as well as its innovative products and growing digital banking presence.
KBank, the country’s third-largest bank by assets, reported first-half net profit of Bt21.6 billion ($651 million) this year, an increase of 13.2% over the same period in 2017. Return on equity was an impressive 12.2%, compared with 8.52% at Bangkok Bank and 7.19% at Krung Thai Bank. KBank’s net interest margin of 3.4% continues to surpass that of its peers thanks to its focus on growing retail and SME loans.
“KBank is well run and generally on the cutting edge,” says one senior bank analyst. “It has been challenged by SMEs, but this is part of the normal business cycle, and as the cycle improves, so will KBank’s SME portfolio and earnings.”
KBank has other strings to its bow. It is the market leader in mutual funds through Kasikorn Asset Management, with 20% of the market as of the end of May. It is one of the top names in debt capital markets, with 19 deals valued at $1.67 billion for the first six months of this year. And on the IT front, KBank continues to be a mover and shaker. The bank’s mobile banking app K Plus boasts more than eight million users and is slated to reach 10 million by the end of December.