For the first quarter period of 2023, CIMB Thai Group recorded a consolidated operating income that rose by THB 344.7 million or 9.9% year-on-year to THB 3,828.8 million from 3M2022. This was mainly contributed by a 1.5% growth in net interest income and a 46.5% growth in other income, offset by a 15.0% decline in net fee and service income. Pre-provision operating profit increased by 10.2% YoY to THB 1,868.4 million, attributed to a 9.9% higher income, offset by a 9.6% increase in operating expenses. However, the banking group headquartered in Malaysia saw its net profit decrease by THB 230.9 million or 21.8% YoY to THB 830.1 million due to higher operating expenses, coupled with a 128.0% increase in expected credit loss (ECL).
On a YoY basis, net interest income increased by THB 35.0 million or 1.5%, mainly driven by loan expansion. Other operating income increased by THB 367.3 million or 46.5%, mainly from higher gains on investments and sale of non-performing loans. These were partially offset by lower net fee and service income of THB 57.7 million, or a 15.0% decline, mainly due to lower fee income from insurance brokerage and underwriting income. Operating expenses increased by THB 171.1 million or 9.6%, mainly from higher impairment loss on the sale of properties. However, the 3M2023 cost-to-income ratio improved to 51.2% compared to 51.4% in 3M2022 as a result of stronger operating income growth compared to operating expenses.
Net interest margin (NIM) over earning assets stood at 2.6% in 3M2023, compared to 2.8% in 3M2022, as a result of higher cost of funds.
As at 31 March 2023, total gross loans stood at THB 237.4 billion, an increase of 0.9% from 31 December 2022. Deposits at THB 267.9 billion, a decrease of 7.6% from THB 289.7 billion as at end of December 2022. The modified loan-to-deposit ratio increased to 88.6% from 81.2% as at 31 December 2022.
Gross non-performing loans (NPL) stood at THB 7.6 billion, with a lower gross NPL ratio of 3.1% from 3.3% as at 31 December 2022 due to portfolio reshaping in line with the wind-down of Commercial Banking. CIMB Thai said it continues to exercise high credit risk underwriting standards and risk management policies. The Bank is also focusing on improving productivity, monitoring collection, and managing all accounts closely and effectively. CIMB Thai Group’s loan loss coverage ratio stood at 122.6% as at 31 March 2023, from 114.6% at the end of December 2022. Total allowance for expected credit losses stood at THB 8.6 billion, THB 1.5 billion over the Bank of Thailand’s reserve requirements.
