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WASHINGTON: The International Monetary Fund will systematically address corruption and its impact on economic growth with all its member countries under new guidelines launched on Sunday.
The stricter new policy also aims to tackle how rich countries contribute to corruption in the developing world by failing to prevent bribery and money laundering or by allowing anonymous corporate ownership.
“We know that corruption hurts the poor, hinders economic opportunity and social mobility, undermines trust in institutions and causes social cohesion to unravel,” IMF Managing Director Christine Lagarde said in a statement.
“We have now adopted a framework for enhanced engagement on governance and corruption that aims for a more systematic, evenhanded, effective and candid engagement with member countries.”
Corruption and poor governance sap economic growth and exacerbate inequality, according to the IMF, and the new policy framework attempts to ensure the institution will hold all members to the same standards — something the fund said it had not always done.
The new policy comes as Ukrainian authorities work to implement stringent new anticorruption reforms at the behest of the IMF, which has held up the latest instalment of a US$17.5 billion, (RM68 billion) aid package.
The revised good governance guidelines, which take effect on July 1, follow a recent review of the IMF's 20-year-old policy framework which concluded the fund had sometimes employed euphemisms when discussing corruption in member states — leaving local officials unclear about IMF concerns.
And IMF analysis sometimes failed to apply the same standards evenly to all members.
Under the new guidelines approved by the IMF board on April 6, the fund will discuss good governance concerns in all annual economic reviews of member countries.
IMF officials however say they do not expect the policy will lead to more stringent conditions on loans, which go to a minority of the fund's 189 members and which already include anti-corruption provisions.
The fund also will rely on the findings of outside transparency campaigners who have criticized the existence of tax and corporate havens in advanced economies as a conduit for illicit financial flows to and from poorer countries.
However, the IMF will not investigate specific instances of corruption.
Rather, it will focus on the strength of key economic institutions: fiscal and central bank governance, market regulation, the rule of law and policies on money laundering and countering terrorism financing.
IMF analysis suggests falling 25 notches on a corruption index could shave as much as 0.5% points off a country's annual growth — amounting to tremendous economic losses over multiple years.
In unveiling the new policy on Sunday at the close of the IMF-World Bank spring meetings, Lagarde said the fund's board supported a “more intrusive” approach to member state evaluations.
“Because it is a macroeconomic issue, the IMF is really perfectly legitimate in acting, especially when we have a programme in a country,” she said. — AFP
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PETALING JAYA: CIMB Thai Bank PCL’s net profit jumped 39.3% to THB 168.9 million in the first quarter ended March 31, 2018 from THB 121.2 million in the previous corresponding quarter.
The group said in a statement that it was mainly attributed to an 8.1% growth in operating income and a 4.5% drop in provisions, offset by a 10.6% increase in operating expenses.
On a year-on-year basis, its operating income rose to THB 3,382.2 million from an increase of 5.4% in net interest income and 11.1% in net fee and service income arising from higher fees from insurance, hire-purchase and mutual funds.
Additionally, it said other operating income also rose by 30.1% from the gain on sales of available for sale securities.
However, it said operating expenses increased by 10.6%, mainly from higher expenses from properties for sale and personnel cost, partially offset by lower expenses from premises and equipment.
This resulted in a higher cost to income ratio of 57.2% during the three months period compared to 55.8% previously.
Meanwhile, its net interest margin over earning assets stood at 3.98% within the same period from 3.77% a year ago, from more efficient funding cost management.
As at March 31, 2018, the group's total gross loans, which includes loans guaranteed by other banks and loans to financial institutions, stood at THB 213.7 billion, an increase of 0.3% from Dec 31, 2017.
Its gross non-performing loans (NPL) stood at THB 11.4 billion, with an equivalent gross NPL ratio of 5.2% from 4.8% as at Dec 31, 2017. The increase was attributed to the sale of NPLs in 2017.
CIMB Thai's loan loss coverage ratio decreased to 92.3% as at March 31 from 93.2% as at Dec 31, 2017.
Total consolidated capital funds, meanwhile, stood at THB 40.7 billion as at March 31. Bank of International Settlement ratio stood at 16.4%, of which 12.4% comprised Tier-1-capital.
CIMB Thai said it continues to exercise high credit risk underwriting standards and risk management policies. It also focuses on improving productivity, monitoring collection and managing all accounts closely and effectively.