CIMB Niaga 1Q net profit up 7.6% on higher non-interest income, credit charges

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KUALA LUMPUR (April 24): PT Bank CIMB Niaga Tbk, CIMB Group Holdings Bhd’s Indonesian unit, reported today that net profit climbed 7.6% year-on-year to IDR944 billion in its first quarter ended March 31, 2019 (1QFY19), due to higher non-interest income as well as a 19-basis-point improvement in credit charges.

Non-interest income grew 4% to IDR1.03 trillion, while credit charges improved to 1.6% from 1.79%.

“Provisions were 16.2% lower year-on-year (in 1QFY19) reflecting the gradual improvement in the economic environment,” said CIMB Niaga president director Tigor M Siahaan in a statement today.

Loan loss coverage, meanwhile, remains comfortable at 113.8%, while total loans grew 5% to IDR187.99 trillion as corporate and commercial loans cumulatively rose 5.1% y-o-y.

“Our strategy to focus on the Mortgage and Small Medium Enterprise (SME) segments continue to gain traction as both segments grew by 13.1% and 8.1% year-on-year, respectively,” Tigor said.

Total third party deposits stood at IDR190.56 trillion, with current account savings account (CASA) ratio at 53.7%. Savings account grew by 2.8% year-on-year, CIMB Niaga said, in line with its continued commitment to digital enhancement and customer experience.

As at March 31, 2019, 95.6% of CIMB Niaga’s total transactions were made via digital banking channels, it added.

Going forward, the Indonesian unit said it would continue to focus on expanding its consumer and SME businesses, building its CASA franchise, and strengthening its shariah-compliant product offerings.

"At the annual general neeting of shareholders held by CIMB Niaga on April 15, 2019, the shareholders approved a cash dividend payout of a maximum of 20% or no greater than IDR696.5 billion from CIMB Niaga's 2018 net profit. The cash dividend will be paid on 15 May 2019," Tigor added.