PETALING JAYA: CIMB Thai Group’s net profit for the quarter ended March 31 jumped 92.5% year-on-year (y-o-y) to 325 million baht (RM42.26mil) on the back of operating income growth and a drop in provisions.
In a statement, the bank said operating income for the quarter rose 3.4% y-o-y to 3.5 billion baht, as net interest income grew 4.3% on loan expansion and higher interest income on investments.
Other operating income rose 10.7 million baht or 3.4% from an increase in gains on the sale of non-performing loans (NPL) 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 7.9 million baht or 1.7%.
However, the bank incurred a higher operating expense in line with its Fast Forward expansion strategy.
“Operating expenses increased by 157.7 million baht 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 the three-month 2019 (3M19) period compared to 57.2% in 3M18,” said CIMB Thai.
Net interest margin over earning assets stood at 3.31% in the quarter versus 3.98% in 3M18 due to the higher cost of funds.
Total gross loans were 230.9 million baht, 1.4% higher from Dec 31, 2018, while deposits stood at 235 billion baht, a slight increase of 0.3% from 234.3 billion baht at end-2018.
The modified loan-to-deposit ratio rose to 98.3% compared to 97.2% as at Dec 31, 2018.
Gross NPL stood at 10 billion baht 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 11 billion baht, which was 5.4 billion baht over the central bank’s reserve requirements.
Total consolidated capital funds as at March 31, 2019, stood at 48.1 billion baht. The BIS ratio stood at 8.9%, of which 13.8% comprised tier-1 capital.