KUALA LUMPUR: CIMB Thai Bank PCL has registered a net profit of 1.501 billion baht for the year ended December 31, 2019, an over 216-fold year-on-year (y-o-y) increase of 1.49 billion baht.
CIMB Thai president and chief executive officer Adisorn Sermchaiwong said this was mainly attributed to a 48.7 per cent decline in provisions resulting from remedial actions to improve the assets quality and a 3.5 per cent growth in operating income.
He said on a y-o-y basis, CIMB Thai Group’s consolidated operating income had increased by 472.5 million baht or 3.5 per cent to 14.2 billion baht from higher net interest income of 160.6 million baht or 1.5 per cent y-o-y mainly from loan expansion and higher interest income on hire purchase business and investments.
CIMB Thai’s net fee and service income increased by 362.3 million baht or 20 per cent, due to higher fees from insurance and debt capital markets.
Other operating income decreased by 50.5 million baht or 4.5 per cent mainly attributed to losses on financial instruments designated at fair value through profit or loss offset by gains from trading and foreign exchange transactions and an increase in gains on investments and gains on sale of non-performing loans (NPLs).
For the year ended December 31, 2019, operating expenses rose by 1.19 billion baht or 14.1 per cent y-o-y, largely due to higher personnel cost and other operating expenses attributed to an amendment bill to the Labour Protection Law which required higher compensation for employees who have retired or have over 20 years of service.
Coupled with expenses incurred from the Fast Forward expansion strategy, the cost to income ratio was higher at 68.5 per cent in 2019 compared to 62.1 per cent in 2018.
Net interest margin over earning assets stood at 3.31 per cent in 2019, compared to 3.71 per cent in 2018, owing to higher cost of funds.
As at December 31, 2019, total gross loans stood at 242.1 billion baht, up 6.3 per cent from December 31, 2018.
Deposits stood at 241.5 billion baht, an increase of 3.1 per cent from 234.3 billion baht at the end of December 2018.
The gross NPL stood at 11.3 billion baht, with an equivalent gross NPL ratio of 4.6 per cent from 4.3 per cent as at December 31, 2018, arising from certain corporate accounts and retail segments.
“CIMB Thai continues to exercise high standards for credit risk underwriting and risk management policies. The bank also continues to focus on improving productivity, monitoring collection and managing all accounts closely and effectively,” said Adisorn.
Meanwhile, CIMB Thai Group’s loan loss coverage ratio stood at 93.7 per cent as at December 31, 2019 compared to 107 per cent as at the end of December 2018.
As at December 31, 2019, total provisions stood at 10.5 billion baht, translating to a 4.9 billion baht excess over the Bank of Thailand’s reserve requirements.
Total consolidated capital funds as at December 31, 2019 stood at 47.6 billion baht.