Kasikornbank Public Company (KBANK) Investor Update summary

Strategic and Operating Environment

• Facing significant economic and geopolitical headwinds, with medium-term challenges to targets.

• Thai GDP growth revised to 1.5%, with risks from weak exports, tourism, and household debt.

• Policy rate expected to be cut to 1.5% in the second half, ending 2025 at 1.25% as inflation stays low.

• Government stimulus and infrastructure projects provide limited short-term support.

• Household debt to GDP forecast to fall below 88% in 2025, with subdued retail loan growth.

Financial Performance and Guidance

• 1H25 net profit was Bt26.28bn, down 0.98% YoY, mainly due to lower NIM and subdued loan growth.

• NIM dropped to 3.31% in Q2 and 3.36% in 1H25, reflecting lower rates and a focus on asset quality.

• Loan growth declined 2.0% YTD, with a focus on quality and secured lending.

• Net fee income grew 1.17% YoY, driven by payment services and wealth management.

• Cost to income ratio rose slightly to 41.82% in 1H25, with productivity improvements and expense control.

Asset Quality and Capital Management

• NPL ratio stable at 3.18% in 1H25, with coverage ratio rising to 162.77%.

• Credit cost was 162 bps, slightly above target to build additional buffer amid uncertainty.

• CET1 ratio at 17.7%, with a medium-term target of at least 15% to prepare for Basel III reforms.

• Dividend payout policy maintained at a minimum of 50%, aiming for 50-60% in the medium term.

• Additional capital distribution (special dividend/share buyback) considered based on performance and market conditions.