KUALA LUMPUR: CIMB Thai Group's net profit for the quarter ended March 31, 2019, jumped 92.5% year-on-year (y-o-y) to THB325mil (RM42.26mil) on the back of operating income growth and a drop in provisions.
In a statement issued today, the bank said operating income for the quarter rose 3.4% y-o-y to THB3.5bil as net interest income grew 4.3% on loan expansion and higher interest income on investments.
Other operating income rose THB10.7mil or 3.4% from an increase in gains on sale of non-performance loans and higher gains on trading and foreign exchange transactions, partially offset by higher losses on financial instruments.
Higher expenses boosted the bank's net fees and services income by THB7.9mil or 1.7%.
However, the bank incurred a higher operating expense in line with its Fast Forward expansion strategy.
"Operating expenses increased by THB 157.7 million or 8.2%, mainly from higher personnel cost and premises, and equipment expenses," it said.
"This resulted in a higher cost to income ratio of 59.8% in 3M2019 compared to 57.2% in 3M2018," said CIMB Thai.
Net interest margin over earning assets stood at 3.31% in the quarter versus 3.98% in 3M2018 due to the higher cost of funds.
Total gross loans was THB230.9mil, 1.4% higher from Dec 31, 2018, while deposits stood at THB235bil, a slight increase of 0.3% from THB234.3bil at end-2018.
The Modified Loan to Deposit Ratio rose to 98.3% compared to 97.2% as at Dec 31, 2018.
The gross non-performing loans (NPL) stood at THB10bil with a stable gross NPL ratio of 4.3%, which was unchanged from Dec 31, 2018.
"CIMB Thai continues to exercise high credit risk underwriting standards and risk management policies.
"The Bank also focuses on improving productivity and monitoring collection," it said.
CIMB Thai's loan loss coverage ratio increased to 109.5% as at March 31, 2019, from 107% as at Dec 31, 2018.
As at March 31, 2019, total provisions stood at THB11bbil, which was THB5.4bil over the central bank's reserve requirements.
Total consolidated capital funds as at March 31, 2019, stood at THB48.1bil. The BIS ratio stood at 8.9%, of which 13.8% comprised Tier-1-capital.
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