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Loan expansion across markets adds to PT Bank CIMB Niaga profit rise

Loan expansion across markets adds to PT Bank CIMB Niaga profit rise

(5 August 2015 – Indonesia) PT Bank CIMB Niaga Tbk reported an unaudited consolidated operating income of Rp6726 billion (A$683 million), a 1.5 percent year-on-year (YoY) growth, with a corresponding net profit of Rp176 billion for the six months period ended 30 June 2015.

CIMB Niaga’s softer first half of 2015 results were attributed to the economic slow-down coupled with a challenging business environment.

The lower YoY net profit came mainly from high level of provisions predominantly from the coal and coal related sector.

President director of CIMB Niaga, Tigor M. Siahaan said; “We believe our core business remains strong.

“Despite the challenging environment, our top line results continued to improve as reflected by the 8.5 percent growth in net interest income which was lifted by an expansion in loans across all our markets and customer segments.

“Despite our lackluster YoY performance, the quarter-on-quarter (QoQ) traction provides a base for a more positive outlook for 2H15 in line with sustained top line growth and improvement in provision levels.

“As such, we are confident that the gross non-performing loans (NPL) of 4.28 percent as at 30 June 2015 will be gradually lower going forward.

“We believe CIMB Niaga will have a stronger foundation in 2H15 by continuing to focus on loan and deposit growth as well as managing operating efficiencies,” Siahaan said.

With total assets of Rp245.24 trillion as at 30 June 2015, representing a 9.1 percent YoY increase, CIMB Niaga maintained its position as Indonesia's fifth largest bank by assets.

This emanated from the 9.8 percent growth in gross loans to Rp180.82 trillion as at 30 June 2015.

Corporate loans recorded the highest growth of 23.4 percent YoY to Rp58.09 trillion, followed by Micro Small Medium Enterprise (MSME) which grew 7.9 percent YoY to Rp35.94 trillion, and Consumer loans grew by 6.9 percent YoY to Rp51.25 trillion.

Loans from Commercial Banking declined by 2.1 percent YoY to Rp35.54 trillion due to a decrease in investment loans by 9.1 percent YoY.

Within the Corporate loans, working capital loans increased 51.3 percent YoY to Rp25.29 trillion, while investment loans increased 8.0 percent YoY.

Personal loans posted the highest growth in Consumer loans with a 30.6 percent YoY increase to Rp2.45 trillion, followed by a 27.1 percent YoY growth in Credit Card loans to Rp5.72 trillion.

CIMB Niaga’s loan to deposit ratio (LDR) was 95.8% at the end of June 2015, declining from 97.8% at the same period last year.

As at 30 June 2015, third-party deposits amounted to Rp185.99 trillion, up 12.2 percent YoY.

CIMB Niaga said it continues to optimise the most advanced technologies in developing digital features for its branchless banking services, including upgrading its core banking system to support future business growth.

This is as part of the company’s strategy to become a leading digital bank as well as increase customer deposits and fee-based income.

As at end of June 2015, around 93 percent of the total transactions made by Consumer customers at CIMB Niaga were through branchless banking channels such as CIMB Clicks, Go Mobile, ATMs and the innovative Rekening Ponsel (mobile wallet).

CIMB Niaga’s gross NPL ratio stood at 4.28 percent as at 30 June 2015, compared to 2.97 percent as at the same period a year ago.

As at 30 June 2015, CIMB Niaga’s Capital Adequacy Ratio (CAR) stood at 16.0 percent, compared with the same period last year of 16.1 percent.

To support its business growth, CIMB Niaga continues to improve customer experience by offering a full range of products and services through 919 network channels (including 20 mobile branches) as at 30 June 2015.

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