(6 February 2025) Kiatnakin Phatra Financial Group (KKP) has reported steady progress in navigating challenges and laying the foundation for sustainable growth. Despite the slow recovery of the Thai economy and persistent headwinds in the automotive sector, the Bank has taken significant steps to improve its performance and position itself for future challenges and uncertainties.
Navigating Challenges with Resilience
Since mid 2024, new loan quality of KKP’s hire purchase portfolio has been improving, gradually enhancing the overall performance from the effect of the post-Covid car price situation. The Bank’s online deposit and investment channels, such as KKP Savvy, KKP Edge, and Dime!, have also demonstrated growth in deposits, while the launch of foreign currency deposits has provided customers with more options to manage exchange costs effectively.
“2024 was a year of recalibration for us,” said Mr. Aphinant Klewpatinond, Chief Executive Officer of Kiatnakin Phatra Financial Group. “While challenges persisted, we focused on laying a strong foundation for sustainable growth. Our emphasis on quality loan origination and generation of non-interest income from innovative financial solutions and offshore investment opportunities reflects our commitment to delivering long-term value for our clients and shareholders.”
Meanwhile, despite the downturn in the Thai Stock Exchange during 2024, the capital market business continued to perform, generating increased non-interest income, with the combined assets under advice and assets under management exceeding 1 trillion baht, driven by its pioneering role in offshore investment opportunities, including foreign exchanges and private markets.
In investment banking, KKP maintained a strong performance, leveraging on financial advisory and related services on key transaction such as the business rehabilitation of Thai Airways International Public Company Limited. The brokerage business maintained its position as the market leader with the largest market share. This consistent performance highlights the resilience and adaptability of the Bank’s business model.
Strategy for 2025: A Focus on Quality and Stability
Looking ahead, KKP is committed to pursuing a selective and quality-driven approach to new loan origination. This prudent strategy aims to ensure a more stable portfolio, with reduced credit costs and appropriate risk management, particularly in light of Thailand’s high household debt. While this approach may result in lower volumes and reduced interest income from the loan portfolio in the short term, it aligns with the Bank’s long-term vision of fostering a sustainable financial ecosystem.
“As we move into 2025, our focus will remain on the quality and sustainability of our loan portfolio,” said Mr. Philip Chen Chong Tan, President of Kiatnakin Phatra Bank Public Company Limited. “Our retail banking team is dedicated to helping customers land opportunities or navigate economic uncertainties while ensuring that we uphold our commitment to financial responsibility and innovation.”
Since 2023, the bank has continuously provided support to quality customers affected by economic conditions, including participants in the ongoing "You Fight, We Help" program.
Building on Strength
KKP remains a trusted leader in wealth management, with a proven track record in helping clients explore offshore investment opportunities, with recognition as Thailand’s Best Private Bank by many internationally-renowned publications. The Bank is confident that its client-centric strategies and innovative offerings will continue to drive growth in assets under advice and assets under management.
“Our financial stability and careful allocation of resources have allowed us to weather market challenges while preparing the foundation for future opportunities,” said Mr. Preecha Techarungchaikul, Head of Finance and Budgeting of Kiatnakin Phatra Bank Public Company Limited. “By maintaining discipline in our financial management and investing in high-potential areas like offshore markets, we are well-positioned to deliver consistent growth and value for all stakeholders.”
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KKP Forecasts Thai Economy to Slow Down in 2025.
With Weakened Tourism, Household Debt Pressure on Growth, and Trade Risks from U.S. Policies, GDP is Expected to Grow Only 2.6%
Dr. Pipat Luengnaruemitchai, Chief Economist, KKP Research, Kiatnakin Phatra Financial Group, state that Thailand’s economy is expected expand by 2.6% in 2025, slightly slowing from the 2.7% projected for 2024. The main drivers of growth remain the tourism and service sectors. However, the growth contribution from tourism is expected to diminish as the industry returns to near-normal levels. Meanwhile, the industrial and export sectors continue to face pressure due to competitiveness challenges. Additionally, the contraction of bank credit, stemming from high household debt and sluggish economic conditions, is negatively affecting durable goods consumption and the real estate sector.
Externally, Thailand faces risks from U.S. trade policies, which may be used as a negotiation tool. Thailand ranks 11th among the countries with the highest trade surpluses with the U.S., while ASEAN as a whole ranks 2nd, following China. This makes Thailand and ASEAN potential targets for U.S. trade measures, which could impact Thailand’s trade sector. Apart from potential effects on exports, Thailand may also face pressure to grant more market access on certain goods, including the agricultural products. On the other hand, Thailand could benefit from multinational companies relocating their production bases. Therefore, the country must be well-prepared to navigate these challenges and negotiate optimal outcomes.
Amid economic uncertainty, Dr. Pipat emphasizes the crucial role of fiscal and monetary policies in managing risks. Structural reforms to boost investment and enhance Thailand’s economic potential are also essential. It is expected that the policy interest rate may be further reduced this year, while the government continues to implement a fiscal deficit policy to stimulate economic growth.
However, fiscal constraints are becoming increasingly significant, with public debt approaching 70% of GDP. This necessitates a careful review of economic stimulus policies to ensure the most effective outcomes. Additionally, government tax revenues are expected to decline relative to economic size, while public spending needs continue to rise. As a result, reforming the public administration system to improve efficiency, expanding the tax base, and restructuring the tax system are essential measures to increase government revenue, address inequality, and enhance national competitiveness.
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