TMBThanachart reported net profit of THB 14,195 million in 2022, up 36% from 2021. Key drivers were the improvement in revenue and operational efficiency as well as lower provision as the Bank has prudently monitored asset quality along with appropriately providing financial assistance to customers. These would underpin solid financial position and gear up for the potential growth in 2023.
Bangkok, 20 January 2023 – TMBThanachart Bank Public Company Limited or TMBThanachart announced its financial performance for the 4th quarter (4Q22) and the 12-month period of 2022 (12M22). Overall, the Bank’s operating performance continued positive momentum with net profit of THB 3,847 million in 4Q22 which increased by 37% from the same period of last year and THB 14,195 million for 2022, an increase of 36% from 2021. Asset quality was well-managed, reflected by NPL ratio of 2.73% which was lower than the previous year and ended below target guidance.
Mr. Piti Tantakasem, CEO of TMBThanachart, mentioned “The performance in 2022 continuously improved every quarter. Such an achievement was attributable to the combination of proper strategy and successful execution. Key strategies we have always focused on are growing quality loan portfolio, cost discipline, and prudent risk management. More importantly, the Bank has been proactively facilitated and appropriately provided financial assistance to customers, especially those who are vulnerable. As a result, they could overcome all difficult times and be resilient afterward. All our endeavors resulted in quality loan portfolio, lower non-performing loans, and significantly lower provision expenses that would underpin the Bank’s stronger profitability and financial position.
Another key strategy in 2022 is the preparation ahead of rate hike cycle; the Bank could effectively manage the balance sheet through various initiatives such as optimizing deposit composition by pre-emptively funding long-term deposit to lock up rates and expanding the deposit base to support the potential loan growth in 2023. In terms of investment portfolio, the Bank has also shortened investment duration to be more flexible to maximize returns amid the rate hike cycle. Additionally, as we have always maintained a high level of capital, when seeing opportunity in the bond market, we decided to partially repurchase Additional Tier 1 capital debt instruments. This transaction was one of capital optimization initiatives and the Bank also recognized gain from face value spread.
Finally, in terms of post-merger plan, it remained on track, including business group restructuring, the establishment of “ttb consumer”, the launch of the ttb touch application, and the investment and development in digital landscape. All of these are important factors for the potential Revenue Synergy realization in the future. Meanwhile, we already achieved Balance Sheet and Cost Synergy ahead of plan. The Bank has passed the benefits from the merger through shareholders consistently. In 2022, for example, we paid interim dividends and issued warrants, TTB-W1, which were allocated free of charge to our existing shareholders.
With the preparation in various aspects as mentioned above coupled with a strong financial position, in the year 2023, the Bank is ready to continue generating revenue and growth, creating sustainable returns for shareholders along with offering better financial solutions to our customers.”
On the revenue side, the positive momentum continued. In 4Q22, Net Interest Income (NII) was at THB 13,826 million, a 6.6% increase from the previous quarter, thanks to retail loan expansion and funding cost management following deposit rate hikes. For Non-Interest Income (Non-NII), it was THB 4,014 million, up 18.7% QoQ, driven by higher fee income and gain from repurchase of AT1 capital resulting in total net operating income in 4Q22 at THB 17,840 million, up 9.1% QoQ.
For total 12-month period, the Bank’s total operating income was THB 65,852 million which increased 0.5% from the same period last year (YoY). Meanwhile, operating expense (OPEX) stood at THB 29,952 million, down 4.1% YoY, reflecting our cost synergy realization together with cost discipline, cost-to-income ratio in 2022 therefore stayed at 45%, declining from 48% in 2021. Given abovementioned revenue and cost movement, Pre-Provision Operating Profit (PPOP) in 2022 was reported at THB 36,169 million, up 5.4% YoY. In 2022, the Bank set aside provision expense of THB 18,353 million in total which decreased by 14.7% YoY. Net profit therefore was recorded at THB 14,195 million, a 35.5% increase YoY.
The decline in provision was due to the Bank's asset quality management, including closely facilitating customers and appropriately providing financial assistance. As a result, the Bank could continuously control and reduce the proportion of non-performing loans from the highest level during the COVID-19 crisis of 2.98% in 3Q21 to 2.81% at the end of 2021 and 2.73% at the end of 2022, which is below target guidance and below the industry average.
Finally, the Bank’s capital adequacy ratio remained one of the top tiers in Thai banking industry. At the end Dec-22, the preliminary CAR and Tier 1 was reported at 20.0% and 16.3%, compared to 19.3% and 15.3% at the end of 2021. The figures were also well-above the Bank of Thailand’s minimum threshold for D-SIBs banks of 12.0% and 9.5%, respectively.