Profit of CIMB’s Indonesian ops grows by over three times
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CIMB Niaga said in a statement, posted by its parent on Bursa Malaysia’s website, that the improved net profit came on the back of a 1.4% yoy increase in net interest income and a 18.5% yoy jump in non-interest income, mainly due to improved foreign exchange and capital market businesses.
Operating expenses and provisions declined by 1.4% and 7.3% on a yoy basis respectively. “While we remain cautious given the economic situation, we hope our positive performance this quarter will provide a strong base for our results going forward. Our operating income held up well through strong contributions towards non-interest income from an uplift in the treasury business.
“Our credit card business continued to garner market share, while current account and savings account (CASA) balances grew strongly, bringing about a CASA ratio of 52.05%.
“CIMB Niaga capital ratio strengthened to 18%. Our improved capital position should hold us in good stead to face the market and economic uncertainties,” said CIMB Niaga president director Tigor M. Siahaan in the statement.
With total assets of 231.67 trillion rupiah (RM68.54bil) as of March 31, CIMB Niaga maintained its position as Indonesia’s fifth largest bank by assets.
Total gross loans were lower at 171.02 trillion rupiah (RM50.60bil) as at March 31 as the bank maintained a conservative growth strategy.
Despite the slower growth in CIMB Niaga’s loans, several business segments posted positive expansion such as personal loans and credit cards.
“We continue to pursue our aspiration of being a leader in digital services by focusing on customer experience and optimising the use of the latest technology to bring value to our clients,” Tigor said.
In the syariah banking segment, CIMB Niaga’s Islamic business unit’s total financing stood at 7.60 trillion rupiah representing a growth of 13.9% yoy with third-party deposits of 8.16 trillion rupiah as at March 31.
CIMB Niaga’s capital adequacy ratio (CAR) strengthened to 18% as at March 31, 2016.
“The government has proposed some positive changes since the start of the year to boost the economy. Bank Indonesia cut interest rate to 6.75% from 7.50% and the government has also lined up several economic stimulus packages for 2016. I’m confident that as CIMB Niaga remains focus in the areas of asset quality, cost efficiency and CASA growth, the bank will be primed to capitalise on opportunities when the economy improves,” added Tigor.
Questions & Answers
Q.What were the main drivers behind the increase in CIMB Niaga’s net profit?
What were the main drivers behind the increase in CIMB Niaga’s net profit?
The improved net profit stemmed primarily from a 1.4% year-on-year increase in net interest income and an 18.5% jump in non-interest income. This non-interest income growth was mainly due to better foreign exchange and capital market businesses.
Q.How did CIMB Niaga manage its operating costs and provisions?
How did CIMB Niaga manage its operating costs and provisions?
Operating expenses declined by 1.4% year-on-year, while provisions saw a larger reduction of 7.3% year-on-year. These declines contributed positively to the overall financial performance.
Q.Why were the bank's total gross loans lower despite profit growth?
Why were the bank's total gross loans lower despite profit growth?
Total gross loans were lower at 171.02 trillion rupiah as the bank maintained a conservative growth strategy. Despite this, some segments like personal loans and credit cards still showed positive expansion.