Summary
- Operating income of THB 7,156.7 million (+0.7% YoY)
- Net interest income grew by THB 214.4 million (+4.6% YoY) driven by loan expansion
- Net profit of THB 1,368.9 million (-35.3% YoY) due to higher operating expenses and a 94.2% increase in expected credit loss
- Other operating income increased by THB 20.5 million (+1.3% YoY) due to higher gains on investment and the sale of non-performing loans
- NPL ratio decreased from 3.3% to 3.1% as of December 31, 2022
Mr. Paul Wong Chee Kin, President and Chief Executive Officer CIMB Thai Bank PCL ("CIMB Thai") commented on the unaudited consolidated financial results for the six months ended 30 June 2023 ("6M2023"). CIMB Thai Group's consolidated operating income rose by THB 51 million or 0.7% year-on-year ("YoY") to THB 7,156.7 million from 6M2022 mainly contributed by a 4.6% growth in net interest income and a 1.3% growth in other income, which was partially offset by a 21.7% decline in net fee and service income. Pre-provision operating profit contracted 7.3% YoY to THB 3,105.6 million as the 0.7% growth in operating income was offset by the 7.9% rise in operating expenses. Net profit was THB 746.6 million or 35.3% YoY lower at THB 1,368.9 million from higher operating expenses coupled with a 94.2% increase in expected credit loss ("ECL"). The higher ECL was in line with the Bank's prudent approach in view of the prevailing economic environment.
On a YoY basis, net interest income increased by THB 214.4 million or 4.6% mainly driven by loan expansion. Other operating income increased by THB 20.5 million or 1.3% mainly from higher gains on investment and sale of non-performing loans. These were partially offset by lower net fee and service income of THB 183.9 million or 21.7%, largely attributed to lower fee income from insurance brokerage.
Operating expenses increased by THB 297.0 million or 7.9%, mainly from higher impairment loss on the sale of properties. This resulted in a higher cost to income ratio of 56.6% in 6M2023 compared to 52.8% in 6M2022.
Net Interest Margin ("NIM") over earning assets stood at 2.7% in 6M2023, compared to 2.8% in 6M2022, as a result of higher cost of funds.
As at 30 June 2023, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at THB 242.9 billion, an increase of 3.2% from 31 December 2022. Deposits (inclusive of bills of exchange, debentures and selected structured deposit products) stood at THB 289.7 billion, which was flat compared to end December 2022. The modified loan to deposit ratio increased to 83.8% from 81.2% as at 31 December 2022.
The gross non-performing loans ("NPL") stood at THB 7.7 billion, with a lower gross NPL ratio of 3.1% from 3.3% as at 31 December 2022, in line with the portfolio reshaping efforts to exit Commercial Banking. 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.
CIMB Thai Group's loan loss coverage ratio stood at 122.1% as at 30 June 2023, from 114.6% at the end of December 2022. Total allowance for expected credit losses stood at THB 8.7 billion, THB 1.5 billion over the Bank of Thailand's reserve requirements.
Total consolidated capital funds as at 30 June 2023 stood at THB 58.1 billion. The BIS ratio stood at 21.2%, of which 15.7% comprised Tier-1-capital.