This article first appeared in The Edge Financial Daily on April 26, 2018

KUALA LUMPUR: PT CIMB Niaga Tbk reported a 37% year-on-year (y-o-y) increase in its net profit to 877 billion rupiah (RM246.8 million) for the first quarter ended March 30, 2018 (1QFY18), on the back of higher non-interest income (NII).

In a statement yesterday, the bank said its NII for the quarter increased 38.5% to 992 billion rupiah, while provision expenses fell 21.2% y-o-y.

“We posted a positive performance in 1QFY18 in line with the gradual improvements in macroeconomic conditions. Our operating income of 4 trillion rupiah increased 5.6% y-o-y while our costs were 4.4% higher y-o-y at 2 trillion rupiah.

“Our progressive improvement in asset quality management brought about a 21.2% y-o-y reduction in provisions. As a result, we posted a 37% y-o-y increase in net profit to 877 billion rupiah,” said CIMB Niaga president director Tigor M Siahaan.

The bank maintained its position as Indonesia’s second-largest national private listed bank by assets, with total assets of 257.5 trillion rupiah as at March 31, 2018.

It said consumer loans stood at 48.1 trillion rupiah, accounting for 27% of total loans. Micro small medium enterprise (MSME) loans stood at 35.1 trillion rupiah or 20% of total loans, while wholesale banking accounted for the largest proportion of the loan book, at 65.2 trillion rupiah or 36%.

Meanwhile, commercial loans totalled 30.7 trillion rupiah, accounting for 17% of the loan book.

“Our strategy to focus on the mortgage and SME segments is gaining traction, with each segment growing 9.9% and 5.3% y-o-y respectively, while our corporate and commercial loans grew 7.3% and 4.9% y-o-y respectively,” said Tigor.

The bank said 93% of total transactions by customers were made through digital channels such as CIMB Clicks, Go Mobile, automated teller machines and the Rekenin Ponsel mobile wallet.

CIMB Niaga is majority owned by CIMB Group Holdings Bhd.