Operating income was lower by 1.6% while improved cost controls brought about a 2% decline in operating expenses.
KUALA LUMPUR: : CIMB Thai Bank PCL’s net profit fell 46.3% to 191.23 million Thai baht (RM23.23mil) for the second quarter ended June 30, 2018 from 356.63 million baht in the same period last year, due to higher operating expenses coupled with bad and doubtful debts and impairment losses.
It reported on Thursday its operating income rose by 4.9% on-year to 3.41bil baht. Its net interest income rose to 2.63bil baht.
CIMB Thai president and CEO Kittiphun Anutarasoti said for the six months ended June 30, CIMB Thai group’s consolidated operating income rose by 6.5% year-on-year (yoy) to 6.79bil baht mainly contributed by a 5.2% growth in net interest income, a 10% growth in net fee and service income and a 12.6% growth in other income.
Pre-provision operating profit decreased by 1.4% yoy to 2.92bil baht due to a 13.3% yoy increase in operating expenses. Net profit decreased by 117.7mil baht or 24.6% yoy to 360.1mil baht due to higher operating expenses coupled with a 1.0% increase in provisions.
On a yoy basis, CIMB Thai’s net interest income increased by 5.2% mainly driven by loan expansion and lower interest expenses. Net fee and service income increased by 89.8mil baht or 10.0% from higher mutual funds, insurance and hire-purchase fees. Total other operating income increased by 12.6% from higher treasury income due to increased market activity.
Operating expenses increased by 455mil baht, 13.3%, mainly from higher personnel cost and loss on sale of properties for sale. This resulted in a higher cost to income ratio of 57.0% in 6M2018 compared to 53.6% in 6M2017.
Net interest margin (NIM) over earning assets stood at 3.87% in 6M2018, compared to 3.81% in 6M2017 as a result of more efficient management of funding costs.
As at June, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at 215.2 billion baht.
Its gross non-performing loans (NPL) stood at 12.6 billion baht, with an equivalent gross NPL ratio of 5.8% from 4.8% as at Dec 31, 2017.
CIMB Thai Group’s loan loss coverage ratio decreased to 90.1% as at June 30 from 93.2% at the end of December 2017. As at June 30, total provisions stood at 11.3 billion baht, translating to a 4.0 billion baht excess over the Bank of Thailand’s reserve requirements.
Total consolidated capital funds as at June 30 stood at 43.9 billion baht. BIS ratio stood at 17.0%, 12.0% of which comprised Tier-1-capital.
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