- CIMB Group Holdings
Bhd’s (CIMB) 93.15%-owned subsidiary CIMB Thai Bank plc (CIMB Thai) registered
a more normalised net earnings of THB155.6mil in 4QFY12, compared with the
chunky net earnings of THB1,048mil in 3QFY12 (2QFY12: THB33mil). This was on
the absence of exceptional gains from the sale of NPL via government-owned Thai
Asset Management Corporation (TAMC). The gain from sale was circa THB1.3bil
which was recognised in 3QFY12.
- Loans growth picked
up with a 9.7% QoQ and 16.8% YoY increase in 4QFY12, higher than 3QFY12’s 8.6%
QoQ. The growth came largely from the retail segment. Deposit growth was strong
as well at 8.7% QoQ and 33.0% YoY.
- NIM seems to have
stabilised on a QoQ basis, with an estimated NIM of 3.16% in 4QFY12 or a mere
4bps drop QoQ. This may be due to a higher utilisation of loan-to-deposit ratio
(LDR) at 95.0% in 4QFY12 (3QFY12: 90.7%), although NIM seems to be
well-sustained, if considering that growth came largely from the retail loan
segment. Fee income was healthy (+31.7% QoQ), attributed to corporate finance
and advisory fees.
- Gross NPL was
reduced substantially by 12.2% QoQ, which the company attributed to continued
resolution efforts and improved collection process. Gross NPL ratio has thus come
down to 2.8% in 4QFY12 from 3.5% in 3QFY12.
- Loan loss provision
was much lower at THB327mil in 4QFY12, compared with THB813mil in 3QFY12. Credit cost came in at an estimated 96bps in
4QFY12 (3QFY12: 254bps, 2QFY12: 35bps). However, loan loss cover came in lower
on a QoQ basis at 85.1% in 4QFY12 compared with 88.7% in 3QFY12. Thus, we
believe this was likely due to write-offs.
Nevertheless, the overall asset quality has improved as there appears to
be no longer any lingering effects from the floods slightly more than year
ago.
- The 4QFY12’s
results indicate some pick-up in loans growth, with a surprisingly stable NIM.
Asset quality has also improved, which is positive. CIMB Thai’s net earnings contribution
to CIMB is estimated at 1.4% in 4QFY12 (3QFY12: 9.4%, 2QFY12: 0.3%). Yearly net
earnings contributions were at 3.7% in FY12F vs. 3.3% in FY11. Thus, overall,
CIMB Thai is still not a major contributor although operationally it is on the
right track. Maintain BUY on CIMB.
Source: AmeSecurities
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