KUALA LUMPUR (April 19): CIMB Thai Bank PCL’s net profit for the first quarter ended March 31, 2024 (1QFY2024) dropped 24.6% year-on-year to 626.1 million baht from 830.1 million baht, as it reported lower operating income and higher expenses.  

The group recorded an 8.4% drop in operating income and an 11.8% increase in operating expenses. The effects of these were partially offset by a 36.9% decline in expected credit loss, according to CIMB Thai president and chief executive officer Paul Wong Chee Kin in a statement. CIMB Group Holdings Bhd has a 94.83% interest in CIMB Thai.

CIMB Thai's operating income fell to 3.51 billion baht as net interest income slid 1.2% to 28.8 million baht, amid an increase in interest expenses on deposits and lower net fee and service income of 26.2 million baht.

The bank also recorded higher impairment loss on properties for sale, and related taxes and duties, which lifted operating expenses for the quarter by 231.7 million baht or 11.8%.

This raised the group's cost to income ratio to 62.5% in 1QFY2024 from 51.2% in 1QFY2023, the bank said.

Net interest margin (NIM) for the quarter dipped to 2.2% from 2.6% a year earlier, due to higher cost of funds.

As at March 31, 2024, the bank had total gross loans amounting to 248.3 billion baht, up 1.4% from Dec 31, 2023.

Gross non-performing loans (NPL) ratio inched up slightly to 3.4% for the March quarter, compared to 3.3% as at Dec 31, 2023, mostly contributed by retail loans.

“However, CIMB Thai continues to exercise high credit risk underwriting standards and robust risk management policies. The Bank also focuses on improving productivity, monitoring collection and managing all accounts closely and effectively,” it assured.

Gross NPL amounted to 8.4 billion baht as at March 31, 2024, while its loan loss coverage ratio stood at 121.3%, down from 124.2% at end December 2023.

CIMB Thai’s allowance for expected credit loss stood at 9.6 billion baht, which is 1.5 billion baht over the Bank of Thailand’s reserve requirement, said the bank.

It had total consolidated capital funds of 59.7 billion baht as at March 31, 2024, and a capital ratio of 20.8%, of which 15.5% comprised Tier-1 capital.