CIMB Thai swings into the black in FY17

CIMB Thai president and CEO Kittiphun Anutarasoti said the improvement was due to a 1.8% year-on-year growth in operating income and a 19.5% on-year drop in provisions, while other operating expenses rose slightly by 2.6%.

KUALA LUMPUR: CIMB Thai Bank plc swung into profitability in the financial year ended Dec 31, 2017 with earnings of 384.9m baht (RM47.72m) compared with a net loss of 629.50mil baht in 2016 on rising income.

CIMB Thai president and CEO Kittiphun Anutarasoti said the improvement was due to a 1.8% year-on-year growth in operating income and a 19.5% on-year drop in provisions, while other operating expenses rose slightly by 2.6%.

“Operating income rose by 226.6mil baht to 13.154bil baht, mainly driven by the increase in net interest income and net fee and service income,” he said.

He said that higher mutual funds, corporate finance and hire-purchase fees resulted in an increase of 18.9% on-year or 308.9mil baht improvements in net fee and service income.

CIMB Thai's net interest margin (NIM) over earning assets was 3.89% in 2017, compared to 3.77% in 2016 due to better funding cost management.

Its lower equivalent gross non-performing loans (NPL) ratio of 4.8% compared to 6.1% as at Dec 31, 2016 mainly due to the sale of NPLs in 2017, more efficient risk management policies and improved asset quality management and loan collection processes.

As at 31 December 2017, CIMB Thai's total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at 213bil baht, up 3.2% from Dec 31, 2016.

Kittiphun said the gross NPL was 10.7bil baht, with a lower equivalent gross NPL ratio of 4.8% compared to 6.1% as at Dec 31, 2016. 

“The lower NPL ratio was mainly due to the sale of NPLs in 2017, more efficient risk management policies and improved asset quality management and loan collection processes.

“CIMB Thai Group’s loan loss coverage ratio increased to 93.2% as at Dec 31, 2017 from 77.3% at the end of December 2016. As at Dec 31, 2017, our total provisions stood at 9.9bil baht showing an excess of 3.7bil baht over Bank of Thailand’s reserve requirements,” he said.