CIMB Thai FY2023 Net Profit Sinks 44.9% Due To Expenses, Credit Loss

CIMB Thai reported its unaudited 2023 full results with the group’s operating income increasing by THB 170.9 million or 1.3% year-on-year (YoY) to THB 13,771.6 million from 2022 mainly contributed by 10.5% growth in other income and 1.7% growth in net interest income, partially offset by a 17.9% decline in net fee and service income.

Pre-provision operating profit decreased by 10.6% YoY to THB 5,138.3 million, attributed to the 10.0% rise in operating expenses. Net profit stood at THB 1,605.3 million, a decrease of THB 1,305.5 million or 44.9% YoY compared to 2022 due to operating expenses growth exceeding operating income growth, coupled with a 48.5% increase in expected credit loss (ECL).

The higher ECL was in line with the Bank’s prudent approach in view of the prevailing economic environment. Operating income growth was mainly attributed to other operating income growth of THB 267.9 million or 10.5%, mostly from higher gains on investment and gains on sale of non-performing loans. This was partially offset by lower net gains on financial instruments measured at fair value through profit or loss. Net interest income increased by THB 163.3 million or 1.7%, primarily driven by loan expansion and an increase in interest income on investments. The net interest income was partially offset by lower net fee and service income of THB 260.3 million or 17.9% YoY, largely attributed to lower fee income from
insurance brokerage and underwriting fee income.

For the year ended 31 December 2023, operating expenses expanded by THB 782.2 million or 10.0%, driven from higher impairment loss on properties for sale, as well as taxes and duties. This resulted in a higher cost to income ratio of 62.7% in 2023 compared to 57.7% in 2022.

Meanwhile, net interest margin (NIM) over earning assets stood at 2.6% in 2023, compared to 2.7% in 2022, arising from higher cost of funds. As at 31 December 2023, total gross loans (inclusive of loans guaranteed by other banks and loans to
financial institutions) stood at THB 245 billion, an increase of 4.1% from 31 December 2022.

CIMB Thai Group’s loan loss coverage ratio as at 31 December 2023 stood at 124.2% from 114.6% at the end of December 2022. Total allowance for expected credit losses stood at THB 9.6 billion, THB 1.5 billion over the Bank of Thailand’s reserve requirements.

Total consolidated capital funds as at 31 December 2023 stood at THB 59.2 billion. The BIS ratio stood at 22.0% of which 16.4% comprised Tier-1 capital

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