Friday 29 Mar 2024
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KUALA LUMPUR (Jan 15): CIMB Group Holdings Bhd’s 98.43%-owned subsidiary CIMB Thai Bank PCL saw its net profit for the fourth quarter ended Dec 31, 2018 (4QFY18) fall 98.2% to THB6.9 million (RM886,469) from THB384.9 million a year ago, on higher operating expenditure (opex).

In a statement filed with Bursa Malaysia today, CIMB Thai president and chief executive officer Kittiphun Anutarasoti said the group saw a 9.6% increase in operating expenses to THB8.34 billion in 4QFY18, mainly from higher personnel cost in line with the bank’s Fast Forward expansion strategy and loss on sale of properties for sale.

This resulted in a higher cost to income ratio of 61.7% in 2018 compared with 57.9% in 2017.

The group also saw lower net fee and services income during the quarter under review, which fell by 7% to THB1.81 billion due to higher fees and service expenses.

However, net interest income for 4QFY18 was up 5.3% year-on-year (y-o-y) to THB10.74 billion, while provisions for bad and doubtful debts and impairment losses declined by 2.6% to THB4.92 billion.

Income tax expenses had more than doubled to THB264.3 million in 4QFY18, further eroding the group’s profitability.

The weak quarterly earnings dragged the group into the red for the full year 2018 (FY18), posting a net loss of THB804.28 million compared with a net profit of THB71.39 million in FY17. This comes in the absence of a tax credit of THB70 million in FY17.

Net interest margin over earning assets stood at 3.71% in FY18, compared with 3.89% in FY17, as a result of lower yield on earning asset.

As at  Dec 31, 2018, CIMB Thai’s total gross loans stood at THB227.8 billion, up 6.9% y-o-y.

Deposits stood at THB234.3 billion, an increase of 6.5% from THB220.1 billion at end-December 2017.

The modified loan to deposit ratio was higher at 97.2% compared with 96.8% as at Dec 31, 2017.

The gross non-performing loans (NPL) stood at THB 9.9 billion, with a lower gross NPL ratio of 4.3% compared with 4.8% as at Dec 31, 2017, thanks to more efficient risk management policies, improved asset quality management and loan collection processes as well as the sale of some NPLs in 2018.

CIMB Thai’s loan loss coverage ratio increased to 107% as at FY18 from 93.2% as at FY17.

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