CIMB Thai FY19 net profit expands 216-fold

KUALA LUMPUR (Jan 21): CIMB Thai PCL today reported a net profit of 1.502 billion baht (RM201.15 million) for the year ended Dec 31, 2019 (FY19), a 216-fold increase over 1.49 billion baht a year earlier.

The improvement was mainly due to a 48.7% decline in provisions resulting from remedial actions to improve the assets quality and a 3.5% growth in operating income, partially offset by a 14.1% increase in operating expenses, according to CIMB's filing with Bursa Malaysia today.

CIMB Group Holdings Bhd holds a 94.83% indirect stake in CIMB Thai.

CIMB Thai's consolidated operating income for FY19 increased 3.5% to 14.2 billion baht, thanks to a higher net interest income of 160.6 million baht, mainly from loan expansion and higher interest income on hire purchase business and investments.

Meanwhile, net interest margin over earning assets stood at 3.31% in 2019, compared with 3.71% in 2018, owing to higher cost of funds.

Operating expenses rose by 14.1% in FY19, largely due to higher personnel costs and other operating expenses attributed to an amendment bill to the Labour Protection Law.

CIMB Thai president and chief executive officer Adisorn Sermchaiwong said the law requires higher compensation for employees who have retired, or have over 20 years of service.

"Coupled with expenses incurred from the Fast Forward expansion strategy, the cost-to-income ratio was higher at 68.5% in 2019, compared to 62.1% in 2018," he said.

As at Dec 31, 2019, total gross loans stood at 242.1 billion baht, up 6.3% from a year earlier.

Deposits stood at 241.5 billion baht, up 3.1% from 234.3 billion baht as at Dec 31, 2018.

Shares of CIMB Group closed up 1 sen or 0.20% at RM5.13 today, for a market capitalisation of RM50.91 billion.