CIMB Thai operations unaudited financial results for 2021 see the group recorded a net profit of THB 2,440.6 million, which is an increase of THB 1,150 million or 89.1% year-on-year, compared to 2020.
According to President Paul Wong Chee Kin, the improvement was mainly attributed to better cost controls resulting in an 8.1% decline in operating expenses and a 25.7% decrease in expected credit losses, despite a 3.9% drop in operating income. On a YoY basis, operating income declined by THB 579.7 million, or 3.9%, to THB 14,347.4 million from the drop in net interest income of THB 988.5 million, or 9.0%, due to the lower interest income on loans, as well as a decline in hire purchase business from the lower credit expansion.
This was partially offset by the increase of THB 337.6 million, or 26.9 %, in net fee and service income, driven by higher fee income from insurance and mutual fund brokerage. Other operating income increased by THB 71.2 million, or 2.6%, from an increase in gains on financial instruments measured at fair value through profit or loss.
For 2021, operating expenses decreased by THB 723.3 million or 8.1%, largely due to better optimisation of cost management. This consequently improved the cost to income ratio to 57.0% in 2021 compared to 59.6% in 2020. Net interest margin (NIM) over earning assets stood at 3.1% in 2021, compared to 3.2% in 2020, arising from lower interest income on loans and the hire purchase business
Total gross loans (inclusive of loans guaranteed by other banks and loans to financial institutions) stood at THB 211.9 billion, a decrease of 6.6% from the previous year. Deposits stood at THB 233.1 billion, a decrease of 7.1% from THB 250.9 billion. The modified loan to deposit ratio increased to 90.9% from 90.5%.
Gross NPLs stood at THB 7.9 billion, with a lower equivalent gross NPL ratio of 3.7% compared to 4.6%. The lower NPL ratio was mainly due to the sale of some NPLs in 2021, more efficient risk management policies, and improved asset quality management and loan collection processes.
CIMB Thai Group’s loan loss coverage ratio stood at 117.5% from 93.3%. Total allowance for expected credit losses stood at THB 8.3 billion, THB 1.5 billion over the Bank of Thailand’s reserve requirements. Total consolidated capital funds stood at THB 54.4 billion. The BIS ratio stood at 22.4%, 16.3% of which comprised Tier-1-capital.