KUALA LUMPUR – CIMB Thai Bank PCL’s net profit for the six-month (6M) period ended June 30, 2021 (6M2021) decreased by 431.1 million baht (RM55.59 million) or 31.1% year-on-year (y-o-y) to 954.8 million baht.
CIMB Thai Bank is 94.83% indirectly owned by CIMB Group Holdings Bhd’s (CIMB).
In a filing with Bursa Malaysia today, president and chief executive officer Paul Wong Chee Kin said the lower net profit was mainly from the 19.1% y-o-y increase in expected credit losses, reflected by the elevated provisions from economic uncertainty and credit migration from customers affected by the Covid-19 pandemic.
He said in the same period, CIMB Thai Bank’s consolidated operating income decreased 644.2 million baht or 8.1% y-o-y to 7.28 billion baht.
“The lower operating income was attributed to a 11.7% drop in net interest income and 2.3% decrease in other income, offset by a 8.9% expansion in net fee and service income,” he said.
On a y-o-y basis, he said net fee and service income increased by 61.6 million baht or 8.9%, arising from higher insurance brokerage and underwriting income, while net interest income decreased by 672.5 million baht or 11.7% due to lower interest income on loans and hire purchase business from the lower credit expansion.
He said operating expenses decreased by 579.9 million baht or 12.3% largely due to better cost management and better optimisation of resources and the cost to income ratio improved to 56.7% in 6M2021 compared with 59.5% in 6M2020.
Wong said net interest margin over earning assets stood at 3.2% in 6M2021 compared with 3.3% in 6M2020, resulting from lower interest income on loans and hire purchase business.
He said the non-performing loans (NPL) stood at 10.6 billion baht, translating to a higher impaired loan ratio of 4.8% compared with 4.6% as at December 31, 2020 due to the decrease in total loan outstanding balance despite the NPL not being significantly changed.
“However, CIMB Thai Bank continues to exercise high credit risk underwriting standards and risk management policies.
“The bank is continuing its focus on improving productivity and monitoring collection,” he said.
Wong said CIMB Thai Bank’s loan loss coverage ratio stood at 101.4% as at June 30, 2021 from 93.3% at the end of December 2020.
He said as at June 30, 2021, the total allowance for expected credit losses stood at 9.9 billion baht, 1.8 billion baht over the Bank of Thailand’s reserve requirements.
He added that the total consolidated capital funds as at June 30, 2021 stood at 53.4 billion baht. – Bernama, July 21, 2021
