KUALA LUMPUR (April 21): CIMB Group Holdings Bhd’s 94.8%-owned subsidiary CIMB Thai Bank PCL saw its net profit for the first quarter ended March 31, 2021 (1QFY21) fall by 68.4% year-on-year (y-o-y) to 341.32 million baht (about RM44.89 million) from 1.08 billion baht due to a jump in credit losses.

In a filing with Bursa Malaysia, CIMB said the Thai subsidiary's expected credit losses increased 64.32% to 1.01 billion baht from 616.16 million baht for 1QFY20.

It noted that total operating income during the quarter was 17.2% lower y-o-y at 3.51 billion baht, from 4.24 billion baht a year prior, following a 12.9% decline in net interest income (NII).

The lender’s NII fell to 2.46 billion baht from 2.83 billion baht a year prior.

In a separate statement, CIMB Thai president and chief executive officer (CEO) Paul Wong noted that its net interest margin (NIM) dipped to 3.08% in 1QFY21 from 3.31% in 1QFY20.

Total gross loans, inclusive of loans guaranteed by other financial institutions and loans to financial institutions, stood at 219.5 billion baht. Total deposits in the bank amounted to 244.7 billion baht, whereas its modified loan-to-deposit ratio stood at 89.7% from 90.3% as at end-December 2020.

Gross non-performing loans (NPLs) stood at 10.6 billion baht, resulting in a impaired loan ratio of 4.8% from 4.6% at end-December 2020.

“The higher NPL ratio was mainly due to a decrease in the total loan outstanding balance, while non-performing loans had not significantly changed. However, CIMB Thai continues to exercise high credit risk underwriting standards and risk management policies. The bank is continuing its focus on improving productivity and monitoring collection.

"CIMB Thai Group’s loan loss coverage ratio stood at 98.9% as at March 31, 2021 from 93.3% at the end of December 2020. As at March 31, 2021, total allowances for expected credit losses stood at 9.6 billion baht, 1.9 billion baht over the Bank of Thailand’s reserve requirements,” it noted.

On Bursa today, shares in CIMB were 1.17% or five sen lower at RM4.24 at the time of writing, valuing it at RM42.07 billion, with 2.46 million shares done so far.