KUALA LUMPUR (July 21): CIMB Group Holdings Bhd's 94.83%-owned subsidiary CIMB Thai Bank PCL's net profit for the cumulative six months ended June 30, 2022 (6MFY22) jumped 122% year-on-year (y-o-y) to 2.12 billion baht from 1.16 billion baht.

The improvement was mainly attributed to better cost control with a 7.4% decrease in operating expenses and a 63.7% decrease in expected credit losses, according to a statement to the local bourse on Thursday (July 21).

In the statement, CIMB Thai president and chief executive officer Paul Wong Chee Kin said the bank's 6MFY22 operating income went down slightly by 1.3% to 7.11 billion baht from 7.2 billion baht, attributed to the drop in net interest income which fell 8.2% amid lower interest income on loans and hire purchase business.

"Other operating income increased by 143.5 million baht or 9.9%, mainly attributed to gains on financial instruments measured at fair value through profit or loss and other income, offset by higher losses on investments.

"Operating expenses decreased by 229.7 million [baht] or 7.4% y-o-y, largely due to better optimisation of cost management. This consequently improved the cost-to-income ratio to 52.8% in 6MFY22 compared to 56.3% in 6MFY21," he said.

Net interest margin over earning assets stood at 2.8% in 6MFY22, compared with 3.2% in the same period of the previous year, resulting from lower interest income on loans and hire purchase business.

As at June 30, 2022, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at 220.2 billion baht, an increase of 3.9% from Dec 31, 2021.

Deposits (inclusive of bills of exchange, debentures and selected structured deposit products) grew 18.1% to 282.9 billion baht from 239.5 billion baht as at end of December 2021.

The modified loan-to-deposit ratio, on the other hand, decreased to 77.8% from 88.5% as at end-December last year.

"Gross non-performing loans (NPLs) stood at 7.4 billion baht, with a lower equivalent gross NPL ratio of 3.3% compared to 3.7% as at Dec 31, 2021. The lower NPL ratio was mainly due to the sale of some NPLs in 6MFY22, as part of efficient risk management policies, improved asset quality management, and loan collection processes.

"CIMB Thai Group's loan loss coverage ratio as at June 30, 2022 stood at 114.3% from 117.5% as at the end of December 2021.

"Total allowance for expected credit losses stood at 7.7 billion baht, 1.5 billion baht over the Bank of Thailand's reserve requirements.

"Total consolidated capital funds as at June 30, 2022 stood at 53.8 billion baht. The BIS ratio stood at 21.6%, of which 15.7% comprised Tier-1-capital," said Wong.

At Thursday's midday break, CIMB Group's share price rose nine sen or 1.77% to RM5.18. At the current price, the bank has a market capitalisation of RM54.26 billion.