KUALA LUMPUR: CIMB Group’s subsidiary CIMB Thai Bank PCL posted lower net profit of 1,290.6 million baht (RM174.23mil) in the financial year ended Dec 31,2020 (FY20) due to higher provisions.
The bank reported on Thursday net profit declined by 727.2 million baht or 36% year-on-year (YoY). This was due to a 60% YoY increase in provisions due to economic uncertainty and potential credit migration from customers affected by the Covid-19 pandemic.
Acting president and CEO of CIMB Thai Bank, Sutee Losoponkul said FY20 consolidated operating income rose by 1.1% year-on-year (YoY) to 14,927.1 million baht from 2019 mainly contributed by a 153.6% growth in other income.
Net interest income fell by 5.6% and net fee and service income declined by 39.9%.
However, pre-provision operating profit increased 12.0% YoY to 6,027.8 million baht due to a 1.1% increase in income, while operating expenses fell by 5.1% YoY.
However, its bottomline was affected by the provision, which took into account the forward-looking expected credit loss (ECL) models and management overlay within a deteriorating economic environment under the TFRS 9 framework.
As at Dec 31,2020, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at 227.0 billion baht, a decline of 6.2% from Dec 31,2019.
Its gross non-performing loans (NPL) stood at 10.5 billion baht, translating to an impaired loan ratio of 4.6% compared to 4.7% as at Dec 31,2019.
“The lower NPL ratio was mainly due to the sale of some NPLs in 2020. CIMB Thai continues to exercise high credit risk underwriting standards and risk management policies.
“The bank is continuing its focus on improving productivity and monitoring collection, ” Sutee said.
CIMB Thai Group’s loan loss coverage ratio stood at 93.3% as at Dec 31,2020 from 99.0% at the end of Dec 31,2019.
As at Dec 31,2020, total allowance for expected credit losses was 9 billion baht, which was 2.1 billion baht excess over the Bank of Thailand’s reserve requirements.
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