KUALA LUMPUR (Oct 31): Growth in non-interest income (NIM) and a decline in provisions boosted the net profit of PT Bank CIMB Niaga Tbk by 18% to 2.6 trillion rupiah (RM 715.7 million) for the first nine months ended Sept 30, 2018 (9M18), from 2.2 trillion rupiah in the corresponding period last year. 

The 92.5%-owned Indonesian banking unit of CIMB Group Holdings Bhd said the stronger net profit was because of a 23.6% year-on-year (y-o-y) growth in non-interest income to 2.9 trillion rupiah and a 26.8% decline in provision expenses. 

In a statement today, CIMB Niaga said its Loan Loss Coverage (“LLC”) remained comfortable at 101.24%. 

“Our 9M18 performance improved from a year ago with asset quality as our main priority, while we craft a prudent growth strategy in the midst of a competitive market. The 9M18 operating income grew by 1.6% y-o-y, mainly driven by non-interest income. Despite the challenging economic and market environment, we managed to lower our provisions by 26.8% y-o-y resulting in an 18.0% y-o-y growth in net profit to 2.6 trillion rupiah,” said CIMB Niaga president director Tigor M Siahaan. 

As at 9MFY18, its total assets grew 3.4% to 260.6 trillion rupiah, elevating it to the second largest bank by assets in Indonesia. Total gross loans climbed 2.2% to 182.8 trillion rupiah. 

Of total loans, wholesale banking comprised the largest proportion of the loan book (36% or 66.1 trillion rupiah), followed by consumer loans (26% or 48.5 trillion rupiah), small medium enterprise (SME) loans (20% or 36.1 trillion rupiah), and commercial loans (18% or 32.1 trillion rupiah). 

The bank’s total third party deposits stood at 194.3 trillion rupiah as at Sept 30, underpinned by a 3.7% y-o-y growth in current accounts and savings accounts. 

The group said CIMB Niaga continues to develop digital-based products to complement the offerings at existing branch offices. “As at September 30, 2018, 93.8% of the total transactions by customers were made through digital banking channels such as CIMB Clicks, Go Mobile, ATMs and Rekening Ponsel (mobile wallet).” 

In the Sharia Banking segment, its Islamic business unit’s total financing stood at 24.1 trillion rupiah, up 62.5% y-o-y, with third party deposits of 22.0 trillion rupiah, higher by 30.3%. 

The Sharia business segment continues to gain positive momentum, posting a 45.2% growth in profit before tax to 523.5 billion rupiah. 

CIMB Niaga’s capital adequacy ratio (“CAR”) stood at 19.41% as at 9MFY18, representing a 45 bps increase from the same period last year.