Kittiphun Anutarasoti, president and chief executive officer, CIMB Thai
Kittiphun Anutarasoti, president and chief executive officer, CIMB Thai

CIMB sees plunge in net profit despite loan growth

Corporate January 16, 2019 01:00

By THE NATION

CIMB THAI yesterday announced its 2018 financial results , showing increased operating income due to loans growth and a lower gross NPL ratio.



The group recorded a consolidated net profit of Bt6.9 million for the year ended on December 31, 2018, a year-on-year decrease of Bt378 million or 98.2 per cent, Kittiphun Anutarasoti, president and chief executive officer, announced yesterday.

The unaudited consolidated financial results show profit before tax decreased by Bt217.6 million or 44.5 per cent year over year, to Bt271.2 million. 

The decrease came mainly from a 9.6 per cent increase in operating expenses and a lower net fee and service income and other income of 7.0 per cent and 2.6 per cent respectively.

This is offset by a 5.3 per cent growth in net interest income and a 2.6 per cent decline in provisions, the bank reported.

On a year on year basis, CIMB Thai group’s consolidated operating income increased by Bt381.7 million or 2.9 per cent from 2017, reaching Bt13.53 billion from higher net interest income of Bt544.3 million, or 5.3 per cent year on year, mainly from loan expansion and higher interest income on investments.

Net fee and service income decreased by Bt136.5 million or 7.0 per cent, due to higher fees and service expenses. Other operating income decreased by Bt26 million or 2.6 per cent due to lower gains on trading and foreign exchange transactions, partially offset by lower losses on financial instruments designated at fair value through profit or loss and an increase in gains on sale of NPLs. 

For the year ended December 31, 2018, operating expenses increased by Bt733 million or 9.6 per cent year on year, mainly from higher personnel costs in line with the Bank’s “fast forward” expansion strategy and loss on sales of properties. This resulted in a higher cost-to-income ratio of 61.7 per cent in 2018 compared to 57.9 per cent in 2017.

Net Interest Margin (NIM) over earning assets stood at 3.71 per cent in 2018, compared to 3.89 per cent in 2017 as a result of lower yield on earning assets.

As of December 31, 2018, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at Bt227.8 billion, achieving an increase of 6.9 per cent from December 31, 2017. Deposits (inclusive of bills of exchange, debentures and selected structured deposit products) stood at Bt234.3 billion, an increase of 6.5 per cent from Bt220.1 billion at the end of December 2017. The modified loan-to-deposit ratio was higher at 97.2 per cent compared to 96.8 per cent as of December 31, 2017.

The gross NPL stood at Bt9.9 billion, with a lower gross NPL ratio of 4.3 per cent compared to 4.8 per cent as of December 31, 2017. The lower NPL ratio was due to more efficient risk management policies, improved asset quality management and loan collection processes, as well as the sale of some NPLs in 2018.

CIMB Thai Group’s loan loss coverage ratio increased to 107 per cent as of December 31, 2018 from 93.2 per cent at the end of December 2017. On December 31, 2018, its total provisions stood at Bt10.5 billion, showing an excess of Bt5 billion over Bank of Thailand’s reserve requirements.

Total consolidated capital funds as of December 31, 2018 stood at Bt47.9 billion, while the BIS ratio stood at 19.3 per cent, 14.1 per cent of which comprised Tier-1 capital.