KUALA LUMPUR (Oct 21): CIMB Thai Bank PCL’s consolidated net profit fell 6.3% to THB900 million in the nine months ended Sept 30, 2014, mainly due to higher operating expenses and provisions.
In a statement to Bursa Malaysia today, the Thai unit of CIMB Group Holdings Bhd said the higher provisions – up 67.4% - mainly arose from economic uncertainties experienced in Thailand since end-2013.
Whilst CIMB Thai’s profit before tax (PBT) came in 3.4% higher, it said PBT would have increased by 21%, if not for the recognition of some items.
These include the one-off gains from payback from a liquidated subsidiary, dividend income from the Vayupak Fund 1 in 9MFY13, and interest income from early redemption of hybrid instruments in 9MFY14.
CIMB Thai said its consolidated operating income jumped 21.2% to THB7.74 billion from the same period last year. It added operating income would have risen 24.3%, if excluding extraordinary items.
However, the group said its other operating income fell 33%.
CIMB Thai said its net interest margin over interest earning assets increased 0.16 basis points to 3.36% from 3.20% in the previous corresponding period on the back of better controls on cost of funds.
“This is despite the intense competition in both deposit and lending markets,” said CIMB Thai president and CEO Subhak Siwaraksa.
As at Sept 30, 2014, CIMB Thai’s total gross loans (inclusive of loans guaranteed by other banks) increase 6.9% to THB183.9 billion from Dec 31 last year.
The group’s gross non-performing loans (NPL) stood at THB6 billion, with an equivalent gross NPL ratio of 3.3% from 2.5% as at Dec 31, 2013.
“The increase in NPL was mainly due to the economic and political disruptions, which affected the borrowers’ repayment ability,” said Subhak.
In addition, CIMB Thai’s loan loss coverage ratio decreased to 94.5% as at Sept 30, 2014 from 107.8% at end-December last year.
CIMB Thai is a 93.71% subsidiary of CIMB Bank Bhd, a 99.99%-owned unit of CIMB Group Sdn Bhd, which is 100%-owned by CIMB Group Holdings Bhd.