KUALA LUMPUR: CIMB Thai Bank PLC registered a net profit of THB1.37bil (RM182.27mil) in the first half of its financial year, a 35.3% decline over the same period last year, on the back of higher operating expenses and increase in expected credit loss (ECL).
In a statement, the 94.83%-owned Thai banking arm of CIMB Group, said the higher ECL of 94.2% was in line with its prudent approach in view of the prevailing economic environment.
Meanwhile, the bank's operating expenses increased 7.9% due to higher impairment loss on the sale of properties, which resulted in a higher cost-to-income ratio of 56.6% in 1HFY23 as compared to 52.8% in 1HFY22.
For the six months period, CIMB Thai reported that operating income rose 0.7% year-on-year (y-o-y) to THB7.16bil due to growth in net interest income and other income.
On a y-o-y basis, net interest income increased by THB214.4mil or 4.6% mainly driven by loan expansion.
Other operating income increased by THB20.5mil or 1.3% mainly from higher gains on investment and sale of non-performing loans.
These were partially offset by lower net fee and service income of THB 183.9 million or 21.7%, largely attributed to lower fee income from insurance brokerage
StarPicks
Embracing emerging Accounting Technology
As at June 30, 2023, CIMB Thai's total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at THB242.9bil, an increase of 3.2% from Dec 31, 2022.
Deposits (inclusive of bills of exchange, debentures and selected structured deposit products) stood at THB289.7bil, which was flat compared to end December 2022.
The modified loan-to-deposit ratio increased to 83.8% from 81.2% as at Dec 31, 2022.
The gross non-performing loans (NPL) stood at THB7.7bil, with a lower gross NPL ratio of 3.1% from 3.3% as at Dec 31, 2022, in line with the portfolio reshaping efforts to exit Commercial Banking.
"CIMB Thai 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," said CIMB Thai president and CEO Paul Wong Chee Kin.
CIMB Thai’s loan loss coverage ratio stood at 122.1% as at June 30, 2023, from 114.6% at the end of December 2022.
Total allowance for expected credit losses stood at THB8.7bil, THB1.5bil over the Bank of Thailand’s reserve requirements.
Total consolidated capital funds as at June 30, 2023 stood at THB58.1bil.
The BIS ratio stood at 21.2%, of which 15.7% comprised Tier-1-capital.