CIMB Thai’s Q2 profit down 46.4% on higher bad debts, impairment losses

CIMB Group Holdings Bhd’s 94.11%-owned indirect subsidiary CIMB Thai Bank PCL reported a 46.4% decline in net profit to THB191.2 million (RM23.2 million) for the second quarter ended June 30, 2018 against THB356.6 million (RM43.3 million) in the previous corresponding period, mainly dragged by bad and doubtful debts and impairment losses.

Its operating income expanded 4.9% to THB3.4 billion from THB3.25 billion for the quarter under review.

For the six-month period, CIMB Thai’s net profit went down 24.6% to THB 360.1 million, due to higher operating expenses coupled with a 1.0% increase in provisions. Meanwhile, its operating income rose 6.5% to THB6.8 billion.

CIMB Thai’s net interest margin over earning assets stood at 3.87%, higher than the 3.81% a year ago, driven by more efficient management of funding costs.

As at June 30, 2018, total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at THB215.2 billion, an increase of 1% from December 31, 2017.

Loan loss coverage ratio decreased to 90.1% as at 30 June 2018 from 93.2% at the end of December 2017. As at 30 June 2018, total provisions stood at THB11.3 billion, translating to a THB4 billion excess over the Bank of Thailand’s reserve requirements.

Total consolidated capital funds as at June 30, 2018 stood at THB43.9 billion. Bank of International Settlement (BIS) ratio stood at 17%, 12% of which comprised Tier-1-capital.

At the noon break, CIMB Group’s share price fell 2 sen or 0.3% to RM5.83 on 7.55 million shares done.