KUALA LUMPUR (April 20): CIMB Thai Bank Public Company Ltd's net profit for the first quarter ended March 31, 2018 (1QFY18) rose 39.3% year-on-year (y-o-y) to 168.9 million baht from 121.2 million baht.

In a statement today, CIMB Thai attributed its earnings to an 8.1% growth in operating income and a 4.5% drop in provisions, offset by 10.6% increase in operating expenses.

Its president and chief executive officer Kittiphun Anutarasoti said that on a y-o-y basis, operating income rose by 8.1% to 3.38 billion baht.

He said other operating income rose by 72.1 million baht or 30.1% from the gain on sales of available for sale securities.

He explained that net interest margin over earning assets stood at 3.98% in 1QFY18, compared to 3.77% in 1QFY17, from more efficient funding cost management.

Anutarasoti said gross non-performing loans (NPL) stood at 11.4 billion baht, with an equivalent gross NPL ratio of 5.2% from 4.8% as at Dec 31, 2017.

He said the increase was attributed to the sale of NPLs in 2017.

"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," he said.

Meanwhile, he said CIMB Thai Group's loan loss coverage ratio decreased to 92.3% as at March 31, 2018 from 93.2% at the end of December 2017.

He said that as at March 31, 2018, total provisions stood at 10.4 billion baht, translating to a 4 billion baht in excess over the Bank of Thailand's reserve requirements.