KUALA LUMPUR (Oct 31): CIMB Group Holdings Bhd’s 92.5%-owned Indonesian banking arm PT Bank CIMB Niaga Tbk (CIMB Niaga) reported a net profit of IDR2.2 trillion for the first nine months ended Sept 30, 2017 (9MFY17), up 69.1% from IDR1.3 trillion in the same period last year.

In a statement today, CIMB Niaga said the stronger net profit came on the back of a 5.4% year-on-year (y-o-y) growth in net interest income to IDR9.37 trillion in 9MFY17 from IDR8.89 trillion, and a 16.4% decline in provision expense.  

“Considering the relatively soft underlying economic activity, we are pleased to announce a continued improvement in our financial performance for 9MFY17. Our operating income grew by 5.1% y-o-y, while costs were under control, rising by only 0.8% y-o-y, below the inflation rate of 3.7%,” said CIMB Niaga president director Tigor M Siahaan.

The decline in provision expense also resulted in lower credit charges of 2.34%, compared with 2.77% a year ago, Tigor said. Given the current economic environment, he added that his team will continue its prudent approach to loan growth, with a focus on asset quality as top priority. 

As at 9MFY17, CIMB Niaga’s total assets grew 6.3% y-o-y to IDR252.13 trillion, placing it as the fifth largest bank by assets in Indonesia, while total gross loans climbed 2.7% y-o-y to IDR178.8 trillion. Of the total loans, corporate loans made up 36%, followed by consumer loans at 28%, micro small medium enterprise (SME) loans at 19%, and commercial loans at 17%.

“Our strategy to focus on mortgage and SME segment is building traction and has grown by 12.1% and 14.5% y-o-y, respectively,” Tigor said.

Total third party deposits stood at IDR187.25 trillion as at 9MFY17, underpinned by a 6.2% y-o-y growth in current account saving account (CASA), which pushed up CIMB Niaga’s CASA ratio by 70 basis point (bps) y-o-y to 53.28%.

In the syariah banking segment, CIMB Niaga's Islamic Business Unit’s total financing jumped 82.5% y-o-y to IDR14.84 trillion, with third party deposits climbing 81.3% y-o-y to IDR16.84 trillion as at 9MFY17.

CIMB Niaga’s capital adequacy ratio stood at 18.96% as at 9MFY17, up 82 bps y-o-y from the same period last year.