KUALA LUMPUR: CIMB Thai Bank PCL’s (CIMB Thai) consolidated net profit for the financial year results ended Dec 31, 2018 (FY2018) decreased 98.2 per cent or 378 million baht year-on-year (y-o-y) to 6.9 million baht (100 baht=RM12.84)
In a filing with Bursa Malaysia today, CIMB Group Holding Bhd said CIMB Thai’s profit before tax also fell by 44.5 per cent y-o-y to 271.2 million baht.
CIMB Thai president and chief executive officer Kittiphun Anutarasoti attributed the performance to a 9.6 per cent increase in operating expenses and lower net fee and service income and other income.
“On a y-o-y basis, CIMB Thai group’s consolidated operating income increased by 381.7 million baht or 2.9 per cent to 13.54 billion baht from higher net interest income of 544.3 million baht or 5.3 per cent y-o-y, mainly from loan expansion and higher interest income on investments,” said Kittiphun.
Net fee and service income decreased by 136.5 million baht or 7.0 per cent, due to higher fees and service expenses.
The bank’s other operating income decreased 26 million baht 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 non-performing loans (NPLs).
“For the year ended Dec 31, 2018, operating expenses increased by 733.0 million baht or 9.6 per cent y-o-y, mainly from higher personnel cost in line with the bank’s ‘Fast Forward’ expansion strategy and losses on sale of properties.
“This resulted in a higher cost to income ratio of 61.7 per cent in 2018 compared with 57.9 per cent in 2017,” said Kittiphun.
He added that gross NPL stood at 9.9 billion baht, with a lower gross NPL ratio of 4.3 per cent y-o-y from 4.8 per cent 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 107.0 per cent in FY2018 from 93.2 per cent in FY2017.
The bank’s total provisions stood at 10.5 billion baht as at Dec 31, 2018, showing an excess of 5.0 billion baht over Bank of Thailand’s reserve requirements.
– BERNAMA