KUALA LUMPUR (Apr 22): CIMB Group Holdings Bhd's 97.94%-owned Indonesian unit PT Bank CIMB Niaga Tbk saw its net profit fell to Rp82.72 billion in the first quarter ended March 31, 2015 (1QFY15) from Rp1.1 trillion a year earlier.

In a statement to Bursa Malaysia today, CIMB Group (fundamental: 1.05; valuation: 1.65) said CIMB Niaga's profit decline came on lower non-interest income and higher expenses. This was despite CIMB Niaga registering higher net interest income.

CIMB Niaga's income statement showed that net interest income rose to Rp2.8 trillion from Rp2.52 trillion.

Non-interest income fell to Rp893.09 billion from Rp1.16 trillion while expenses under this segment  was higher at Rp2.67 trillion compared to Rp1.04 trillion.

Commenting on its financial performance, CIMB Niaga's Vice President Director D James Rompas said, "Despite the challenging operating environment, our 1QFY15 operating income continued to grow well, as reflected in a higher net interest income of 10.8% y-o-y."

Nevertheless, he said asset quality remained a challenge given the economic conditions, volatile Rupiah and softer commodity prices.

"In line with our conservative standards of provisioning, we continue to increase recognition of impaired loans and have improved our loan loss coverage ratio to 102.6% in March 2015 from 98.8% in March last year," he added.

At 12.30pm, CIMB Group shares fell three sen or 0.5% to RM6.24 for a market capitalisation of RM52.56 billion.

A total of 1.3 million shares changed hands.

(Rp100 = RM0.028)

(Notes: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)