KUALA LUMPUR (Jan 18): CIMB Thai Bank Public Co Ltd, a 94.11% indirect subsidiary of CIMB Group Holdings Bhd, has returned to the black for the year ended Dec 31, 2017 (FY17), with a net profit of THB384.9 million (RM47.72 million), compared with a net loss of THB629.5 million (RM78.05 million) in FY16. 

In a filing with Bursa Malaysia, CIMB Thai president and chief executive officer Kittiphun Anutarasoti said the improvement is attributed to a 1.8% year-on-year (y-o-y) growth in operating income and a 19.5% y-o-y drop in provisions, while other operating expenses only slightly rose by 2.6%. 

Compared to FY16, operating income rose by THB 226.6 million (RM28.10 million) or 1.8% to THB13.15 billion (RM1.63 billion), mainly driven by an 18.9% increase in net fee and service income that came in from improvements in mutual funds, corporate finance and hire-purchase fees, as well as an increase in net interest income by 3.4% which resulted from a decrease in interest expenses.

However, this is offset by a decrease of 29.4% in other operating income, mainly from lower gains on investments. 

Kittiphun said Net Interest Margin (NIM) over earning assets stood at 3.89% in 2017, compared with 3.77% in 2016, as a result of a more efficient funding cost management taken by the bank in FY17. 

Meanwhile, CIMB Thai's gross non-performing loan (NPL) stood at THB 10.7 billion (RM1.33 billion), with a lower equivalent gross NPL ratio of 4.8% in FY17, compared with 6.1% as at Dec 31, 2016. 

"The lower NPL ratio was mainly due to the sale of NPLs in 2017, more efficient risk management policies and improved asset quality management and loan collection processes," Kittiphun said.  

"CIMB Thai Group’s loan loss coverage ratio increased to 93.2% as at December 31, 2017, from 77.3% at the end of December 2016. As at December 31, 2017, our total provisions stood at THB 9.9 billion (RM1.23 billion), showing an excess of THB 3.7 billion (RM460 million) over Bank of Thailand’s reserve requirements," Kittiphun added.