KUALA LUMPUR: CIMB Group
's banking franchise in Thailand posted a consolidated operating income in 1Q23 rose 9.9% year-on-year (y-o-y) to THB3.83bil (RM495.3mil) from the same quarter in 2022.
In a statement, CIMB Thai Group said the stronger income was mainly owing to 1.5% growth in net interest income and 46.5% growth in other income, offset by a 15% decline in net fee and service income.
Pre-provision operating profit increased 10.2% y-o-y to THB1.87bil, attributed to the higher income.
However, net profit decreased 21.8% y-o-y to THB830.1mil due to higher operating expenses, coupled with a 128% increase in expected credit loss (ECL).
On a y-o-y basis, net interest income increased 1.5%, mainly driven by loan expansion.
Other operating income increased 46.5%, mainly from higher gains on investments and sale of non-performing loans.
This was partially offset by lower net fee and service income of THB57.7mil, representing a 15% decline, mainly due to lower fee income from insurance brokerage and underwriting income.
Operating expenses increased 9.6%, mainly from higher impairment loss on the sale of properties.
For the quarter under review, the cost-to-income ratio improved to 51.2% compared to 51.4% in 3M22 as a result of stronger operating income growth compared to operating expenses.
Net interest margin (NIM) over earning assets stood at 2.6% in 3M2023, compared to 2.8% in 3M2022, as a result of the higher cost of funds.
As at March 31, 2023, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at THB237.4bil, an increase of 0.9% from Dec 31, 2022.
Deposits (inclusive of bills of exchange, debentures and selected structured deposit products) stood at THB267.9bil, a decrease of 7.6% from THB 289.7bil as at end-December 2022.
The modified loan-to-deposit ratio increased to 88.6% from 81.2% as at Dec 31, 2022.
Gross non-performing loans (NPL) stood at THB7.6bil, with a lower gross NPL ratio of 3.1% from 3.3% as at Dec 31, 2022, due to portfolio reshaping in line with the wind down of Commercial Banking.
"CIMB Thai continues to exercise high credit risk underwriting standards and risk management policies.
"The bank also focuses on improving productivity, monitoring collection and managing all accounts closely and effectively," said president and CEO Paul Wong Chee Kin.
CIMB Thai’s loan loss coverage ratio stood at 122.6% as at March 31, 2023, from 114.6% at the end-December 2022.
Total allowance for expected credit losses stood at THB 8.6bil, THB 1.5 billion over the Bank of Thailand’s reserve requirements.
Total consolidated capital funds as at March 31, 2023 stood at THB57.8bil, while the BIS ratio stood at 22.2% of which 16.5% comprised Tier-1 capital.
