CIMB Thai posts lower Q3 earnings

PETALING JAYA: CIMB Thai Bank PCL’s net profit for the third quarter ended Sept 30, 2017 plunged 82.2% to 76.5 million baht (RM9.7 million) from 431.1 million baht (RM54.8 million) in the previous corresponding period.
The sharp drop in earnings was due to losses on financial liabilities designated at fair value as well as higher bad and doubtful debts and impairment losses.
Its consolidated operating income for the quarter under review, however, expanded 7.8% from 3.21 billion baht to 3.46 billion baht.
For the nine months of the year, its net profit fell 30.6% to 554.4 million baht due to higher provisions.
CIMB Thai president and CEO Kittiphun Anutarasoti said in a statement that the bank saw a 9.8% year-on-year increase in provisions as a result of higher non-performing loans (NPL) compared with end-September 2016.
Consolidated operating income for the nine months rose 1.5% to 9.84 billion baht on higher net interest income.
CIMB Thai said its net interest margin over earning assets stood at 3.88% during the period compared with 3.76% a year ago due to more efficient management of funding cost.
As at Sept 30, 2017, the bank’s total gross loans including loans guaranteed by other banks and loans to financial institutions rose 2.1% to 210.8 billion baht from Dec 31, 2016.
Gross NPL stood at 12.2 billion baht with a lower equivalent gross NPL ratio of 5.7% compared with 6.1% as at Dec 31, 2016. The lower NPL ratio was mainly due to the sale of some NPLs in 1Q17, more efficient risk management policies and improved asset quality management and loan collection processes.
CIMB Thai’s loan loss coverage ratio increased to 85.1% as at Sept 30, 2017 from 77.3% as at Dec 31, 2016. As at Sept 30, 2017, total provisions stood at 10.3 billion baht, showing an excess of 3.6 billion over Bank of Thailand’s reserve requirements.
Total consolidated capital funds as at Sept 30, 2017 stood at 43.8 billion baht. Its BIS ratio stood at 18.0%, 12.7% of which comprised tier-1 capital.
CIMB Group Holdings Bhd owns about 94% of CIMB Thai.