CIMB Thai's Q1 earnings jump 39.3% on higher operating income

PETALING JAYA: CIMB Thai Bank PCL’s net profit jumped 39.3% to THB 168.9 million in the first quarter ended March 31, 2018 from THB 121.2 million in the previous corresponding quarter.
The group said in a statement that it was mainly attributed to an 8.1% growth in operating income and a 4.5% drop in provisions, offset by a 10.6% increase in operating expenses.
On a year-on-year basis, its operating income rose to THB 3,382.2 million from an increase of 5.4% in net interest income and 11.1% in net fee and service income arising from higher fees from insurance, hire-purchase and mutual funds.
Additionally, it said other operating income also rose by 30.1% from the gain on sales of available for sale securities.
However, it said operating expenses increased by 10.6%, mainly from higher expenses from properties for sale and personnel cost, partially offset by lower expenses from premises and equipment.
This resulted in a higher cost to income ratio of 57.2% during the three months period compared to 55.8% previously.
Meanwhile, its net interest margin over earning assets stood at 3.98% within the same period from 3.77% a year ago, from more efficient funding cost management.
As at March 31, 2018, the group's total gross loans, which includes loans guaranteed by other banks and loans to financial institutions, stood at THB 213.7 billion, an increase of 0.3% from Dec 31, 2017.
Its gross non-performing loans (NPL) stood at THB 11.4 billion, with an equivalent gross NPL ratio of 5.2% from 4.8% as at Dec 31, 2017. The increase was attributed to the sale of NPLs in 2017.
CIMB Thai's loan loss coverage ratio decreased to 92.3% as at March 31 from 93.2% as at Dec 31, 2017.
Total consolidated capital funds, meanwhile, stood at THB 40.7 billion as at March 31. Bank of International Settlement ratio stood at 16.4%, of which 12.4% comprised Tier-1-capital.
CIMB Thai said it continues to exercise high credit risk underwriting standards and risk management policies. It also focuses on improving productivity, monitoring collection and managing all accounts closely and effectively.