CIMB Thai’s FY18 net profit drops on higher tax expenses
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CIMB Thai Bank PCL’s unaudited con-solidated net profit for the year ended Dec 31, 2018 (FY18) fell 98.2% year on year to 6.9 million baht (RM883,732), dragged down mainly by higher income tax expenses. Profit before tax decreased 44.5% to 271.2 million baht year on year, mainly due to a 9.6% increase in operating expenses and lower net fee and service income and other income of 7.0% and 2.6% respectively. This was offset by a 5.3% growth in net interest income and a 2.6% decline in provisions.
President and CEO Kittiphun Anutarasoti said CIMB Thai group’s consolidated operating income, on a year-on-year basis, increased 2.9% from 2017 to 13.54 billion baht from higher net interest income of 5.3% on the back of loan expansion and higher interest income on investments.
Net interest margin over earning assets stood at 3.71% in 2018, compared with 3.89% in 2017 as a result of lower yield on earning asset.
As at Dec 31, 2018, CIMB Thai’s total gross loans stood at 227.8 billion baht, making an increase of 6.9% from Dec 31, 2017.
Deposits stood at 234.3 billion baht, an increase of 6.5% from at the end of December 2017. CIMB Thai said the modified loan-to-deposit ratio was higher at 97.2% against 96.8% as at Dec 31, 2017.
The gross non-performing loan (NPL) stood at 9.9 billion baht, with a lower gross NPL ratio of 4.3% compared with 4.8% as at Dec 31, 2017. The lower NPL ratio was due to more efficient risk management policies, improved asset quality management and loan collection processes as well as the sale of some NPLs in 2018.
Questions & Answers
Q.What was the main reason for CIMB Thai's significant drop in net profit for FY18?
What was the main reason for CIMB Thai's significant drop in net profit for FY18?
The main reason for the substantial decrease in net profit was higher income tax expenses. This was despite a 44.5% decrease in profit before tax for the year.
Q.Which factors contributed to the decrease in profit before tax?
Which factors contributed to the decrease in profit before tax?
Profit before tax decreased mainly due to a 9.6% increase in operating expenses and a 7.0% reduction in net fee and service income. Other income also saw a decline of 2.6%.
Q.Did CIMB Thai's operating income increase or decrease in 2018?
Did CIMB Thai's operating income increase or decrease in 2018?
CIMB Thai’s consolidated operating income increased by 2.9% year-on-year in 2018, reaching 13.54 billion baht. This growth was driven by higher net interest income.
Q.What caused the lower non-performing loan ratio in 2018?
What caused the lower non-performing loan ratio in 2018?
The lower non-performing loan ratio was attributed to more efficient risk management policies and improved asset quality management. Loan collection processes and the sale of some NPLs in 2018 also contributed.
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