Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on November 1, 2017

KUALA LUMPUR: CIMB Group Holdings Bhd’s 92.5%-owned Indonesian banking arm PT Bank CIMB Niaga Tbk (CIMB Niaga) reported a net profit of 2.2 trillion rupiah (RM686.45 million) for the first nine months ended Sept 30, 2017 (9MFY17), up 69.1% from 1.3 trillion rupiah in the same period last year.

In a statement yesterday, CIMB Niaga said the stronger net profit was due to a 5.4% year-on-year (y-o-y) growth in net interest income to 9.37 trillion rupiah in 9MFY17 from 8.89 trillion rupiah, 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 5.1% y-o-y while costs were under control, rising 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, he said. Given the current economic environment, he said his team will continue the company’s prudent approach to loan growth, prioritising asset quality.

As at 9MFY17, CIMB Niaga’s total assets grew 6.3% y-o-y to 252.13 trillion rupiah, making it the fifth-largest bank by assets in Indonesia. Total gross loans climbed 2.7% y-o-y to 178.8 trillion rupiah. Of the total loans, corporate loans made up 36%, followed by consumer loans at 28%, micro, small and medium enterprise (SME) loans (19%), and commercial loans (17%).

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

Total third party deposits stood at 187.25 trillion rupiah as at 9MFY17, underpinned by a 6.2% y-o-y growth in current account, savings account (Casa), which pushed up CIMB Niaga’s Casa ratio by 70 basis points (bps) y-o-y to 53.28%.

As for syariah banking, CIMB Niaga’s Islamic Business Unit’s total financing jumped 82.5% y-o-y to 14.84 trillion rupiah, with third-party deposits climbing 81.3% y-o-y to 16.84 trillion rupiah as at 9MFY17.

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

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