CIMB Thai's Q3 earnings more than double

PETALING JAYA: CIMB Group Holdings Bhd's 94.11%-owned indirect subsidiary CIMB Thai Bank PCL's consolidated net profit for the third quarter ended Sept 30, 2018 more than doubled to THB177.26 million (RM22.6 million) from THB76.54 million a year ago, thanks to higher interest income.
However, for the nine-month period, it registered a 3.1% drop in consolidated net profit to THB537.4 million, mainly attributed to a 10.8% increase in operating expenses and lower net fee and service income and other income of 2.4% and 7.4%, respectively.
Consolidated operating income for the group increased 2.5% to THB10.09 billion on the back of higher net interest income mainly from loan expansion. Net fee and service income decreased 2.4%, due to higher fees and service expenses. Other income decreased 7.4% because of lower gains on trading and foreign exchange transactions and lower gains on investments.
Operating expenses increased 10.8% mainly from higher personnel cost in line with the bank’s Fast Forward expansion strategy and loss on sale of properties for sale. This resulted in a higher cost-to-income ratio of 59.7% compared with 55.2% in the same period last year.
Net interest margin over earning assets stood at 3.77%, lower than the 3.88% in the previous corresponding period as a result of lower yield on earning asset.
As at Sept 30, 2018, CIMB Thai's total gross loans stood at THB219.9 billion, marking an increase of 3.3% from Dec 31, 2017. Deposits stood at THB231.6 billion, a rise of 5.3% from THB220.1 billion at the end of December 2017.
Gross non-performing loans (NPL) stood at THB2.6 billion, with an equivalent gross NPL ratio of 5.7% from 4.8% as at Dec 31, 2017. The increase was attributed to commercial banking loans and the sale of NPLs in 2017.
Meanwhile, loan loss coverage ratio increased to 94.1% as at Sept 30, 2018 from 93.2% at the end of December 2017. Total provisions stood at THB11.8 billion, translating to a THB4.6 billion excess over the Bank of Thailand’s reserve requirements.
CIMB Thai said it 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.