CIMB Thai H1 net profit up 5.5% to RM42.5m

KUALA LUMPUR:  CIMB Thai Bank PCL'S net profit rose 5.5% to 367.2mil baht (RM42.52mil) in the first half ended June 30, 2016 on improved operating income and better cost management.

The increase in earnings were partially offset by a 17% on-year increase in provision due to the slower economic recovery.

CIMB Thai Bank president and CEO Subhak Siwaraksa the consolidated operating income rose by 409.5mil baht or 6.7% on-year to 6,487.9mil baht from a year ago, underpinned by a 23.2% growth in net interest income and offset by a 3.0% and 35.8% reduction in net fee and service income and other income respectively. 

“Pre-provision operating profit increased 15.5% on-year to 2,998.2mil baht due to better cost controls as operating expenses only rose 0.2% on-year,” he said.

Subhak said on a on-year basis, net interest income increased by 918.5mil baht or 23.2%, mainly from loan expansion and lower interest expenses. However, net fee and service income fell 22.9mil baht or 3.0%, due to lower loan syndication and loan related fees. 

Other operating income fell 35.8% or 486.1mil baht due to softer treasury businesses but this was partially moderated by higher gains on investment and other operating income.

Thai CIMB's gross non-performing loans (NPL) were 8.8bil baht with an equivalent gross NPL ratio of 4.3%. 

It pointed out this was increase from 3.1% as at Dec 31, 2015 mainly arising from the slower repayment ability from a few corporate and SME accounts given the softer economic environment. 

CIMB Thai said it continues to exercise high credit risk underwriting standards and risk management policies. 

Group’s loan loss coverage ratio decreased to 92.8% as at June 30, 2016 from 106.5% at the end of December 2015. 

As at 30 June 2016, total provisions were 8.1bil baht, or 3.2bil above Bank of Thailand’s reserve requirements.

Total consolidated capital funds as at June 30 were 35.1bil baht.