CIMB Thai 2022 earnings jump 24% on better cost control


CIMB Thai’s president and CEO Paul Wong Chee Kin noted the improvement in earnings was mainly owing to better cost control and a significant 39.4% decrease in expected credit losses due to a lower impairment of assets.

KUALA LUMPUR: CIMB Group Holdings Bhd’s Thai business, CIMB Thai Bank PCL, posted a net profit of 3.03 billion baht (RM395mil) in the financial year ended Dec 31, 2022, which represented a 24.3% year-on-year (y-o-y) rise.

CIMB Thai’s president and CEO Paul Wong Chee Kin, in a statement, noted the improvement in earnings was mainly owing to better cost control and a significant 39.4% decrease in expected credit losses due to a lower impairment of assets.

The stronger performance was despite a marginal decrease in operating income which dropped 2.9% y-o-y to 13.75 billion baht (RM1.8bil) due to a contraction in net interest income while other operating income was 3.9% lower y-o-y due to a decrease in gains on sale of investments.

However, a 3.4% y-o-y increase in net fee and service income from higher underwriting fee income partially offset the decline.

CIMB Thai, which is a 94.83% indirectly held subsidiary of CIMB Group, stated its operating expenses were flat while the cost-to-income ratio in 2022 was higher at 57.1% compared with 55.5% in 2021 due to lower operating income.

The bank’s net interest margin over earning assets stood at 2.7% in 2022 compared with 3.1% in 2021, due to higher cost of funds and lower loan yields.

As at Dec 31, 2022, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at 235.3 billion baht (RM30.7bil), an increase of 11% y-o-y.

Deposits (inclusive of bills of exchange, debentures and selected structured deposit products) stood at 289.7 billion baht (RM37.8bil), an increase of 21% on-year.

The modified loan-to-deposit ratio decreased to 81.2% from 88.5% as at Dec 31, 2021.

Gross non-performing loans (NPL) stood at 7.8 billion baht (RM1bil) with a lower equivalent gross NPL ratio of 3.3% compared to 3.7% as at Dec 31, 2021.

“The lower NPL ratio was mainly due to the sale of some NPLs in 2022, as well as improved efficiency in risk management policies, asset quality management and loan collection processes,” said Wong.

CIMB Thai’s loan loss coverage ratio stood at 114.6% as at Dec 31, 2022, from 117.5% at the end-December 2021.

According to Wong, total allowance for expected credit losses stood at 8.2 billion baht (RM1.07bil).

CIMB Thai’s total consolidated capital funds as at Dec 31, 2022, stood at 57.6 billion baht (RM7.5bil), whilst Bank of International Settlements ratio stood at 21.8%, of which, 16.1% comprised Tier-1 capital.

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CIMB , Thailand , earnings , fees , service , NLP , margins

   

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