CIMB Bank Thai (CIMBT) is optimistic on its business outlook, estimating that profitability will improve over the next two years as infrastructure is developed.
The bank's infrastructure base development plan, the Fast Forward programme spanning 2017-21, has made strides and should significantly improve profitability during 2019-20, said chief executive Kittiphun Anutarasoti.
CIMBT, a small bank, posted net profit for the first nine months this year of 537 million baht, down 3.2% year-on-year.
Fast Forward has entered the final stage of the first phase. Retail banking income has grown 66% during the first nine months this year from the same period in 2017. The benefits will be extended to other segments, in line with progress of the programme.
However, the bank expects that its 2018 loan growth target of 5-10% will not be met.
Mr Kittiphun forecasts lending to expand 4% this year after delivering 3.3% growth so far.
Growth in retail and corporate loans failed to offset a contraction of small and medium-sized enterprise (SME) loans, he said.
Retail loans are expected to show double-digit growth in 2018.
CIMBT is sticking to a lending growth target of 5-10% for 2019.
Better revenue and lower costs will also give a boost to the bank's bottom line next year and in 2020, Mr Kittiphun said, adding that impairment charges for credit losses are expected to decline in line with improving asset quality.
The bank aims to keep a lid on non-performing loans at the current level of 4.3-4.4% until the end of next year.
"We've increased the coverage ratio to 104%, on a par with our industry peers, from 94.1% in the third quarter," Mr Kittiphun said. "The bank set aside an additional 300 million baht for loan-loss provisions in the fourth quarter to prepare for International Financial Reporting Standard 9, as required by the central bank."
CIMBT's shares closed yesterday on the Stock Exchange of Thailand at 0.79 baht, unchanged, in trade worth 94 million baht.