KUALA LUMPUR (Jan 21): CIMB Thai Bank PCL, in which CIMB Group Holdings Bhd (KL:CIMB) owns a 94.83% stake, saw its net profit surged 77.7% to 2.85 billion baht (RM374.5 million) for the financial year ended Dec 31, 2024 (FY2024), up from 1.61 billion baht a year earlier, thanks to higher operating income and lower expected credit losses.

In FY2024, the bank’s consolidated operating income increased 9.7% to 15.1 billion baht from 13.77 billion baht, attributed to strong performance in its other operating income, which grew 49.4% as well as net fees and service income, which increased by 19.9%.

The non-operating income is attributed to higher net gains on financial instruments measured at fair value through profit or loss, bad debt recovery and gains on investment, CIMB Thai said in a bourse filing statement on Tuesday.

Meanwhile, the bank recorded lower net interest income, which fell 3% to 9.47 billion baht from 9.77 billion baht, due to pressure from interest expense. In FY2024, interest expense grew 31.3%, exceeding its interest income, which grew 11.3%.

Its net interest margin over earning assets stood at 2.2% in 2024, compared to 2.6% in 2023, arising from higher cost of funds.

The bank’s expected credit losses fell 13.7% to 2.69 billion baht in FY2024 compared with 3.11 billion baht in FY2023.

Operating expenses increased by 2.6%, mainly because of higher impairment loss on properties for sale, that was partially offset by lower employee expenses which fell 3.3%.

The bank’s cost to income ratio improved to 58.7% compared with 62.7% in 2023 as a result of stronger operating income growth compared to operating expenses.

As at end-December 2024, CIMB Thai’s total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at 251.3 billion baht, while deposits (inclusive of bills of exchange, debentures and selected structured deposit products) came in at 324 billion baht. 

Meanwhile, its modified loan-to-deposit ratio decreased to 77.6% from 78.9% as at end-December 2023, said CIMB Thai.

“Gross non-performing loans [NPLs] stood at 6.7 billion baht, with a lower equivalent gross NPL ratio of 2.6% compared to 3.3% at the end of 2023. The lower NPL ratio was mainly attributed to the sale of NPLs in 2024, improved efficiency in risk management policies, improved asset quality management and loan collection processes,” it said in a statement.

CIMB Thai’s loan loss coverage ratio increased to 137.9% from 124.2% as at end-December 2023. 

“Total allowance for expected credit losses stood at nine billion baht, 1.5 billion baht over the Bank of Thailand’s reserve requirements. Total consolidated capital funds as at Dec 31, 2024 stood at 59.8 billion baht. The BIS [Bank for International Settlements] ratio stood at 21.6%, of which 17% comprised Tier-1-capital,” the bank added.

Shares of CIMB fell six sen or 0.8% to RM7.94 at Tuesday’s closing, valuing the bank at RM85.21 billion.