CIMB Thai’s FY2023 net profit down 44.9 pct to 1.61 bln baht

CIMB Thai Bank Pcl’s net profit fell to 1.61 billion baht, a decrease of 44.9 per cent year-on-year (y-o-y) for financial results for the year ended December 31, 2023 (FY23) due to operating expenses growth exceeding operating income growth, coupled with a 48.5 per cent increase in expected credit loss (ECL). (RM13.27 per 100 baht)

It said that the higher ECL was in line with the bank’s prudent approach in view of the prevailing economic environment.

President and chief executive officer Paul Wong Chee Kin said CIMB Thai group’s consolidated operating income increased by 170.9 million baht or 1.3 per cent y-oy to 13.77 billion from 2022.

“The increase mainly contributed by 10.5 per cent growth in other income and 1.7 per cent growth in net interest income, partially offset by a 17.9 per cent decline in net fee and service income,” he said in a filing with Bursa Malaysia yesterday.

Wong said pre-provision operating profit decreased by 10.6 per cent y-o-y to 5.14 billion, attributed to the 10.0 per cent rise in operating expenses.

CIMB Thai, which is a 94.83 per cent indirectly held subsidiary of CIMB Group Holdings Bhd, said that the operating income growth was mainly attributed to other operating income growth of 267.9 million baht, mostly from higher gains on investment and gains on sale of nonperforming loans.

“This was partially offset by lower net gains on financial instruments measured at fair value through profit or loss,” it said.

Meanwhile, the bank’s net interest income increased by 163.3 million baht, primarily driven by loan expansion and an increase in interest income on investments.

It said operating expenses expanded by 782.2 million baht in FY2023, driven by higher impairment loss on properties for sale, as well as taxes and duties, while net interest margin (NIM) over earning assets stood at 2.6 per cent in 2023, compared to 2.7 per cent in 2022, arising from higher cost of funds.

CIMB Thai said gross non-performing loans (NPL) stood at 8.2 billion baht, with a flat gross NPL ratio of 3.3 per cent compared to 2022, with the gross NPL ratio is reflective of CIMB Thai group’s stringent credit risk underwriting, effective risk management policies, improvement in loan collection processes and continued management of the bank’s NPLs.

“The bank’s loan loss coverage ratio as at December 31, 2023, stood at 124.2 per cent from 114.6 per cent at the end of December 2022 and total allowance for expected credit losses stood at 9.6 billion baht, 1.5 billion baht over the Bank of Thailand’s reserve requirements,” it said.

CIMB Thai added that total consolidated capital funds as at Dec 31, 2023, stood at 59.2 billion baht, while the Bank for International Settlements (BIS) ratio stood at 22.0 per cent, of which 16.4 per cent comprised Tier-1 capital.