CIMB THAI posts higher 6M2017 net profit of THB 477.8 million, an increase of 30.1% YoY

Stocks and Financial Services Press Releases Wednesday July 19, 2017 10:49
Bangkok--19 Jul--CIMB Thai Bank
  • 6M2017 net profit improved 30.1% YoY to THB 477.8 million, on the back of lower operating expenses and provisions.
  • Higher corporate finance fees, hire purchase and mutual fund fees resulted in 21.5% YoY improvement in net fee and service income.
  • Net interest margin (NIM) over earning assets strengthened to 3.81% for 6M2017 (cf. 3.79% in 6M2016) due to better funding cost management.
  • Cost-to-income ratio improved to 53.6% for 6M2017 (cf. 53.8% in 6M2016) as a result of better cost management.
  • Gross NPL ratio stood at 5.4%, down from 6.1% as of 31 December 2016 whilst loan loss coverage ratio strengthened to 84.0%, up from 77.3% as of 31 December 2016.
  • CET1 ratio improved to 13.2% as of 30 June 2017.
6M2017 Financial Results

Mr. Kittiphun Anutarasoti, President and Chief Executive Officer of CIMB Thai Bank PCL, stated that according to the unaudited financial results for the six months ended 30 June 2017, CIMB Thai group recorded a consolidated net profit of THB 477.8 million, a year-on-year ("YoY") increase of THB 110.6 million or 30.1% from 6M2016. Operating income was 1.6% lower. Better cost controls brought about a 2.0% decline in operating expenses, while provisions declined by 6.2%.

On a YoY basis, CIMB Thai group's consolidated operating income decreased by THB 104.7 million, or 1.6% to THB 6,383.1 million from 6M2016, mainly driven by the drop in other income of 41.7% from lower gains on trading and foreign exchange transactions and net gains on investments. This was largely offset by growth in net fee and service income of THB 158.6 million or 21.5% from improvements in corporate finance fees, hire-purchase and mutual fund fees and an increase in net interest income by THB 101.1 million or 2.1% YoY, as a result of lower interest expenses.

Operating expenses contracted by THB 70.6 million or 2.0%, mainly from lower premises and equipment expenses and taxes and duties. The cost to income ratio improved to 53.6% in 6M2017 compared to 53.8% in 6M2016 as a result of better cost management.

Net interest margin (NIM) over earning assets stood at 3.81% in 6M2017, compared to 3.79% in 6M2016 as a result of more efficient management of funding costs.

As at 30 June 2017, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at THB 202.4 billion, marking a decrease of 2.0% from 31 December 2016. Deposits (inclusive of bill of exchanges, debentures and selected structured deposit products) stood at THB 207.0 billion, a decrease of 7.4% from THB 223.5 billion at the end of December 2016. The modified loan to deposit ratio was higher at 97.7% compared to 92.4% as at 31 December 2016.

The gross non-performing loans ("NPL") stood at THB 11.3 billion, with an equivalent gross NPL ratio of 5.4% from 6.1% as at 31 December 2016. The lower NPL ratio was mainly due to the sale of some NPLs in 1Q2017, more efficient risk management policies, continued resolution of the Bank's NPLs and improvements in loan collection processes.

CIMB Thai Group's loan loss coverage ratio increased to 84.0% as at 30 June 2017 from 77.3% at the end of December 2016. As at 30 June 2017, total provisions stood at THB 9.5 billion, translating to a THB 3.3 billion excess over the Bank of Thailand's reserve requirements.

Total consolidated capital funds as at 30 June 2017 stood at THB 43.6 billion. BIS ratio stood at 18.6%, 13.2% of which comprised Tier-1-capital.

"Our half year performance was satisfactory. Net profit improved due to better NIM and lower operating expenses and provisions whilst operating income held relatively steady. Gross loans contracted slightly due to general corporate loan repayment and portfolio recalibration. Asset quality has also improved. Our Consumer, Wholesale and Treasury businesses performed well and Commercial has shown positive growth traction post recalibration. We are on track to turn profitable in FY2017." Kittiphun said.

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