KUALA LUMPUR (July 20): CIMB Thai has recorded a lower net profit of 348.2 million Thai baht (THB) for the six-month period ended June 30, 2015, as compared to THB 625.33 million in the same period last year, recording a 44.3% decline.
In a statement released today, Subhak Siwaraksa, president and chief executive officer of CIMB Thai Bank PCL stated this was mainly due to a 138.5% year-on-year (y-o-y) increase in provisions, amid a weaker economic environment.
However, the group’s consolidated operating income rose by THB 945.1 million or 18.4% y-o-y for the same period to THB 6,078.4 million, underpinned by a 5.0% growth in net interest income, a 28.2% expansion in net fee and service income, and a 76.9% growth in other income.
Meanwhile, lower growth in operating expenses of 1.3% y-o-y, spurred an increase in the pre-provision operating profit of 53.2% y-o-y to THB 2,595.3 million.
Net fee and service income also posted an increase by THB 167.5 million or 28.2% due to higher fees from mutual fund fees, corporate finance fees and insurance premium, while net interest income increased by THB 186.9 million or 5.0%.
“As a result of better cost management and increased income, the cost to income ratio decreased to 57.3% in 6M2015, from 67.0% in 6M2014,” the bank reported.
On the other hand, the net interest margin (NIM) over earning assets dropped 0.3% over the six-month period, as a result of anaemic loan growth and higher low yielding assets due to the slower economic environment.
Total gross loans stood at THB196.6 billion, an increase of 3% from the previous period, while deposits increased 2.6% to THB217.1 billion. This brought the modified loan to deposit ratio slightly higher at 90.5%, as compared to 90.1%.
The group also recorded higher gross non-performing loans (NPL) at THB8.0 billion, with an equivalent gross NPL ratio of 3.9% as compared to 3.3% as at 31 December 2014, caused by slower repayment by a few corporate accounts.
Meanwhile, CIMB Thai’s loan loss coverage ratio decreased to 94.3%, from 95.2%, throughout the six-month period ending 30 June 2015.
However, total provisions of THB7.4 billion showed an excess of THB 2.5 billion over Bank of Thailand’s reserve requirements.
Earnings per share were down to THB 0.02, as compared to THB 0.03 at the end of last year.