Bangkok--18 Oct--CIMB Thai Bank
Supported by higher net interest income and net fee and service income
CIMB Thai Bank Plc. and its subsidiaries today announced their un-reviewed operating results for nine months 2011 which showed total operating income of THB 4.97 billion with a net profit of THB 856.1 million. Growth rates were observed in both net interest income and fee and service income.
Mr. Subhak Siwaraksa President and Chief Executive Officer CIMB Thai Bank PCL stated that CIMB Thai Group’s operating results for the nine months ended 30 September 2011 showed a consolidated net profit of THB 856.1 million, a drop of THB 37.5 million or 4.2% from a net profit of THB 893.6 million in the corresponding period in 2010. This was mainly due to one-off gains from the disposal of Sathorn building and certain subsidiaries in the corresponding period in 2010. Should these items be excluded, the profit would have increased 149.2% year-on-year.
On a year-on-year basis, for the nine months of 2011, the consolidated CIMB Thai Group total operating income increased by THB 127.2 million, or 2.6%, from THB 4.84 billion to THB 4.97 billion. The higher operating income was mainly due to higher net interest income and net fee and service income which were offset by both lower gain on investments and other operating income
On the net interest income side, there was an increase of THB 322.8 million, or 10.1% for the nine months of 2011, largely underlined by loan expansion. Meanwhile on the net fee and service income side, there was increase of THB 97.9 million, or 16.6%, largely attributable to loan related fees and Bancassurance fee. Meanwhile, there was a decrease of THB 293.6 million on non-interest and fee income side, or 28.2%, largely due to the one-off gains from the disposal of the Sathorn building in 1Q10, redemption of the structured deposits and disposal of subsidiaries in the nine months of 2010. If these one-off gains were to be excluded, the non-interest and fee income would have increased by 79.1% year-on-year.
"The overall performance is satisfactory, with loan growth in all segments, especially SME and Corporate loans. As a result, net interest income and fee income in the first nine months increased, hence the improvement of total income year-on-year. For the rest of the year, the Bank will try to maintain such momentum to ensure it will meet the year-round target," said Mr. Subhak.
As of 30 September, 2011, total gross loans less unearned interest stood at THB 112.2 billion, up 19.6% compared to end of December 2010. The loan growth was largely underlined by SME and Corporate loan expansion. Deposits and Bill of Exchanges, meanwhile, stood at THB 125.0 billion, up 12.2% from THB 111.4 billion at the end of December 2010, up by THB 13.6 billion. Given the aforementioned development in loans and deposits, the Loan to Deposit Ratio (including Bill of Exchanges) stood at 89.8%. For bank-only, the Loan to Deposit Ratio (including Bill of Exchanges) stood at 87.9%.
Net Interest Margin (NIM) over interest earning assets dropped to 3.63% in the nine months of 2011 from 3.85% in the corresponding period in 2010. This was mainly due to the increase in deposit rates which were higher than the increase in loan rates as a result of intense deposit soliciting competition in the market, as well as the increase in short-term loans, which have lower interest rates.
In 3Q11, gross non-performing loans (“NPL”) increased to THB 3.8 billion, with an equivalent gross NPL ratio of 3.3% from 2.7% in 4Q10. This was mainly due to the deterioration of credit quality of certain accounts. We have provided adequately provision for these accounts and will continue to monitor the status of these accounts.
CIMB Thai’s loan loss coverage ratio, decreased to 72.4% as of end September 2011 from 91.4% as of end December 2010, as reflected by the increase in gross NPL in the nine months of 2011. Further, as CIMB Thai consciously improves the quality of its customer base, customers who have higher levels of collateral would require less provision, which would then lower the loan loss coverage ratio.
On a year-on-year basis, for the nine months of 2011, operating expenses were higher by THB 263.9 million, or 7.5%. This was mainly due to increased personnel costs and other operating costs especially advertising expenses and these were offset by the decrease in premises and equipment expenses as a result of office consolidation in early 2010.
Total capital funds for the Bank only as of 30 September, 2011 stood at THB 18.8 billion, well-above regulatory requirement, with the BIS ratio of 13.8%, representing Tier-1-capital of 8.1%.