CIMB Thai Bank Q1 net profit down on higher provisions

KUALA LUMPUR: CIMB Thai Bank Plc, a subsidiary of CIMB Bank Bhd, reported a 70% drop year-on-year (yoy) in consolidated net profit to 130.6 million baht (RM14.65mil) for the first quarter ended March 31, 2015.

However, the group’s consolidated operating income rose 9.8% yoy to 2.96 billion baht (RM332.4mil) for the three months.

President and chief executive officer Subhak Siwaraksa said in a statement on Tuesday that the decline in profit was mainly due to a 117.6% yoy increase in provisions.

“The higher provisions are reflective of a weaker environment leading up from the slower economic conditions. Nevertheless, compared with the fourth quarter of 2014, net profit increased 47.1% from 88.8 million (RM9.96mil) to 130.6 million (RM14.7mil), illustrating better abilities to cope with extended slower economic conditions,” he said.

Pre-provision operating profit increased 15.8% yoy to 1.18bil (RM132.6mil) accelerated by lower growth

in operating expenses of 6.2% yoy.

Subhak said on a yoy basis, net fee and service income rose by 90.7 million baht (RM10.18mil) or 28.4%, mainly due to higher fees from insurance premium. Net interest income only increased by 59.1 million baht (RM6.6mil) or 3.2%, resulting from slower loan expansion and early redemption of hybrid instruments in 2014, which resulted in a higher gain in the first quarter of 2014.

Total other operating income jumped by 115.5 million baht (RM12.96mil) or 22.1% largely derived from gains on trading and foreign exchange transactions of 359.2 million (RM40.3mil) or 151.5% under treasury businesses. Also, other operating income increased by 18.9 million (RM2.1mil) or 45.5% from dividend income.

CIMB Thai was the ninth largest bank in Thailand by assets as at the end of 2014, according to CIMB Group Holdings Bhd's 2014 annual report.