KUALA LUMPUR (Jan 20): CIMB Group Holdings Bhd’s 94.83%-owned subsidiary CIMB Thai pcl registered a 24.3% increase in net profit for the financial year ended Dec 31, 2022 (FY2022) to 3.03 billion baht (RM400 million) from 2.44 billion baht in FY2021, driven by better cost control.

The better performance was also attributed to a significant drop of 39.4% in expected credit losses due to lower impairment of assets, despite a marginal decrease in operating income, CIMB Thai said in a statement on Friday (Jan 20).

Operating income declined to 13.75 billion baht from 14.16 billion baht a year earlier amid a contraction in net interest income of 346 million baht due to higher interest expenses, coupled with lower interest income on loans, as well as hire purchase business.

“Other operating income recorded was lower by 107.9 million baht or 3.9%, mainly from a decrease in gains on sale of investments. These were partially offset by an increase of 47.5 million baht or 3.4% in net fee and service income, driven by higher underwriting fee income,” the group said.

Operating expenses, meanwhile, remained flat from continued cost management, while cost to income ratio was higher at 57.1% in 2022 compared to 55.5% in 2021 due to lower operating income, it said.

Arising from higher cost of funds and lower loan yields, CIMB Thai’s net interest margin over earning assets stood at 2.7% in 2022, compared to 3.1% in 2021.

As at Dec 31, 2022, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at 235.3 billion baht, an increase of 11% from Dec 31, 2021. Deposits (inclusive of bills of exchange, debentures and selected structured deposit products) grew to 289.7 billion baht versus 239.5 billion previously.

CIMB Thai’s modified loan-to-deposit ratio decreased to 81.2% from 88.5% as at Dec 31, 2021.

“Gross non-performing loans (NPL) stood at 7.8 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 2022, as well as improved efficiency in risk management policies, asset quality management and loan collection processes,” it added.

Meanwhile, loan loss coverage ratio stood at 114.6% as at Dec 31, 2022, from 117.5% at the end of December 2021.

“Total allowance for expected credit losses stood at 8.2 billion baht, 1.5 billion baht over the Bank of Thailand’s reserve requirements. Total consolidated capital funds stood at 57.6 billion baht, whilst BIS ratio stood at 21.8%, of which 16.1% comprised Tier-1 capital,” said CIMB Thai.

CIMB ended Friday’s morning trading session at RM5.75, up six sen or 1.05%, with some 4.17 million shares done. At this price, the bank was valued at RM61.32 billion.