PETALING JAYA: CIMB Group Holdings Bhd’s commercial banking operations in Thailand posted a lower net profit in the third quarter ended Sept 30 despite steady operating income, as it set aside more money to cover for potential loan losses.
The net profit of its 93.71%-owned subsidiary CIMB Thai Bank PCL for the three-month period was 431 million baht (RM51.5mil) compared with 498 million baht (RM59.6mil) made in the same quarter last year.
Total operating income was 3.2 billion baht (RM382.7mil), CIMB said in a filing with Bursa Malaysia.
For the nine months ended Sept 30, CIMB Thai registered a 4.5% year-on-year (y-o-y) increase in consolidated operating income of 9.69 billion baht (RM1.16bil).
This was derived from a 19.1% growth in net interest income and a 8.2% higher net fee and service income, while other income dropped by 42.7%.
Pre-provision operating profit increased 10.6% y-o-y to 4.38 billion baht (523.8mil) due to the improved operating income and better cost control as operating expenses dropped by 0.02% y-o-y.
Gross non-performing loans (NPL) totalled 9.1 billion baht, with an equivalent gross NPL ratio of 4.2%, which increased from 3.1% as at end-December last year due to a slower repayment ability from borrowers, given the weak economic environment.
“CIMB Thai continues to exercise high credit risk underwriting standards and risk management policies. The bank also focuses on improving productivity, monitoring collection and managing all accounts closely and effectively,” said CIMB Thai president and chief executive officer Subhak Siwaraksa in a statement on Monday.
As of Sept 30, the bank’s total gross loans, which is inclusive of loans guaranteed by other banks and loans to financial institutions, stood at 205.2 billion baht (RM24.54bil).
On a y-o-y basis, net interest income increased by 19.1% as a result of a decrease in interest expenses by 23.8%.
“Net fee and service income increased by 92.3 million baht (RM11.0mil) or 8.2%, mainly due to higher hire-purchase and financial lease fees, as well as mutual funds fees, while total other operating income decreased by 42.7% mainly from treasury businesses,” he said.
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