Krung Thai Bank's 1Q15 earnings slide 5% to THB7.9B

High credit cost was cited.

Krung Thai Bank's net profit in 1Q15 fell 5% YoY to THB 7.9b due to the higher-than-expected provision charge of THB3.7b or 76bp credit cost.

According to a research note from Maybank Kim Eng, NPLs increased by 21% QoQ to THB68b (or 3.48% of total loans) mainly due to the bad loans in the small SME and retail segments.

Maybank Kim Eng also noted that NPL fell 17% QoQ or THB11.3b in 4Q14 due to the debt restructuring and NPL write-off. Coverage ratio fell to 116% from 135% in 4Q14.

Here's more from Maybank Kim Eng:

Net interest income grew only 1% YoY due to lower NIM of 2.85% (-32bps). Non-NII increased 14% YoY, thanks to the improving fee income and share of profit from associates.

OPEX grew 5% YoY to THB13.1b (vs our forecast of THB12.4b) due to employee expenses; cost-to-income ratio was flat at 48.7%.

Note that KTB has combined Krungthai Card Pcl (KTC) in the consolidated financial
statements in 1Q15 so we cannot compare data on QoQ basis.