CIMB Thai net profits up 30 per cent year on year in first half

Kittiphun Anutarasoti, president and chief executive officer of CIMB Thai Bank Pcl, stated that according to the unaudited financial results for the first half of 2017, operating income was 1.6 per cent lower. Better cost controls brought about a 2-per-cent decline in operating expenses, while provisions declined by 6.2 per cent.
On a YoY basis, CIMB Thai group’s consolidated operating income decreased by Bt104.7 million, or 1.6 per cent to Bt6.383.1 billion YoY, mainly driven by the drop in other income of 41.7 per cent 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 Bt158.6 million or 21.5 per cent from improvements in corporate finance fees, hire-purchase and mutual fund fees and an increase in net interest income by Bt101.1 million or 2.1 per cent YoY, as a result of lower interest expenses.
Operating expenses contracted by Bt70.6 million or 2 per cent, mainly from lower premises and equipment expenses and taxes and duties. 
Net interest margin (NIM) over earning assets stood at 3.81 per cent, compared to 3.79 per cent in the same period last year, as a result of more efficient management of funding costs.
As of June 30, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at Bt202.4 billion, down 2 per cent from December 31, 2016. Deposits (inclusive of bills of exchange, debentures and selected structured deposit products) stood at Bt207 billion, a decrease of 7.4 per cent from Bt223.5 billion at the end of December 2016. The modified loan-to-deposit ratio was higher at 97.7 per cent compared to 92.4 per cent as on December 31, 2016.
Gross non-performing loans (NPL) stood at Bt11.3 billion, with an equivalent gross NPL ratio of 5.4 per cent from 6.1 per cent at the end of 2016. The lower NPL ratio was mainly due to the sale of some NPLs in the first quarter of 2017, 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 per cent as on June 30 from 77.3 per cent at the end of December 2016. As on June 30, total provisions stood at Bt9.5 billion, translating to a Bt3.3 billion above the Bank of Thailand’s reserve requirements.
Total consolidated capital funds as on June 30 stood at Bt43.6 billion. BIS ratio stood at 18.6 per cent, 13.2 per cent 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. We are on track to turn profitable in fiscal 2017.” Kittiphun said.