BAY Reports a Drop of 7.5% in 1Q Earnings as ECL Offsets Operating Profits

Bank of Ayudhya Public Company Limited (BAY) has announced its 1Q21 consolidated financial statement through the Stock Exchange of Thailand as follows;

BAY reported a net profit of 6,504 million baht in 1Q21, decreased 7.50% from a net profit of 7,032 million baht in 1Q20, mainly due to moderating operating profits, of which partially offset by lowered expected credit loss.


On a year-on-year basis, the operating profit was 15,545 million baht, decreased by 2,708 million baht or 14.8%, mainly resulting from lowered net interest income attributed to multiple lending rate cuts, together with interest rate ceiling reductions for credit card and personal loans effective from August 1, 2020 onward.


Interest income in 1Q21 was recorded at 24,952 million baht, decreased significantly by 4,866 million baht, or 16.3%, mainly due to a decrease of interest loans and interest on hire purchase and financial lease.


Total non-interest income in 1Q21 was 8,455 million baht, decreased by 154 million baht or 1.8% YoY. Fees and service income decreased by 374 million baht or 5.7%, mainly due to a decrease in card-related fees and auto hire purchase fees, totaling 598 million baht, caused by lower volume of retail businesses. Meanwhile, wealth & fund management and securities-related fees increased by 278 million baht.

Gains on financial instruments measured at fair value through profit or loss (FVTPL) decreased by 590 million baht or 36.9%, mainly driven by the gains on trading and FX transactions.


Non-performing loan (NPL) ratio stood at 1. 99% at the end of March 2021, compared to 2.00% at the end of December 2020. As of March 31, 2021, total loan loss reserves reached 81,330 million baht, resulting in the coverage ratio remaining high at 175.0%.


BAY continued to provide conservative provisions in light of emerging uncertainties from the new wave of coronavirus transmission. The expected credit loss in 1Q21 amounted to 7,314 million baht, equivalent to a credit cost of 159 basis points, a decrease of 3,241 million baht or 30.7%, from an absence of additional management overlay reserved in 4Q20.