CIMB Niaga's 1Q net profit jumps 3.2 times

by **Cals** Sat 30 Apr 2016, 03:04

CIMB Niaga's 1Q net profit jumps 3.2 times

By Chester Tay / theedgemarkets.com | April 29, 2016 : 10:35 PM MYT
KUALA LUMPUR (April 29): PT Bank CIMB Niaga first quarter ended Mar 31, 2016 (1QFY16) net profit jumped 3.2 times to 268.68 billion rupiah, from 82.72 billion rupiah a year ago, mainly due to lower impairment of loans and increased non-interest income.

In its quarterly report released to Bursa Malaysia today, CIMB Niaga’s statements of comprehensive income shows that impairment of loans fell 15.86% to 1.21 trillion rupiah for 1QFY16, from 1.44 trillion rupiah in 1QFY15.

In a press release, CIMB Niaga explained improved net profit came on the back of a 1.4% year-on-year (y-o-y) increase in net interest income and a 18.5% rise in non-interest income from 1QFY15, mainly due to improved foreign exchange and capital market businesses.

On top of that, the group also mentioned that operating expenses and provisions have declined by 1.4% and 7.3% on y-o-y basis, respectively.

For 1QFY16, CIMB Niaga reported a net interest income of 2.84 trillion rupiah, compared with 2.8 trillion rupiah in previous corresponding quarter.

“While we remain cautious given the economic situation, we hope our positive performance [in] this quarter will provide a strong base for our results, going forward,” CIMB Niaga’s president director Tigor M Siahaan said.

He added that CIMB Niaga’s 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%,” Tigor said, adding CIMB Niaga’s capital ratio has strengthened to 18%.

“Our improved capital position should hold us in good stead to face the market and economic uncertainties,” he said.

As at 1QFY16, CIMB Niaga booked 231.67 trillion rupiah worth of total assets in its balance sheet, maintaining its position as Indonesia’s fifth largest bank by assets.

Nevertheless, CIMB Niaga noted total gross loans were lower at 171.02 trillion rupiah as at 1QFY16, as the bank maintained a “conservative growth strategy”.

Despite slower growth in CIMB Niaga’s loans, it mentioned several of its business segments posted positive expansion.

“Personal Loans recorded a 17.5% y-o-y growth to 3.03 trillion rupiah through the X-tra Dana product. As at 1QFY16, the bank had issued over two million credit cards, an increase of more than 12.5% from a year earlier, resulting in a 24.8% YoY growth in credit card loan balances,” it pointed out.

“To date, CIMB Niaga is the third largest credit card issuer in Indonesia. CASA grew 13.9% y-o-y to 89.91 trillion rupiah as at 1QFY16, with the CASA ratio rising 861 basis points (bps) y-o-y to 52.05%. The Loan to Deposit Ratio (LDR) was higher at 97.71% at 1QFY16, compared to 95.79% in the same period a year ago,” it added.

CIMB Niaga’s Capital Adequacy Ratio (CAR) has strengthened to 18% as at 1QFY16.

Apart from that, Tigor also said the group will continue to pursue its aspiration to be a leader in digital services, by focusing on customer experience and optimising the use of the latest technology to bring value to its clients.

“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,” he said.

CIMB Niaga is the Indonesian unit of CIMB Group, Malaysia's second largest lender by assets.

In FY15, 34.37% or RM3.21 billion of CIMB Group’s total net interest income of RM9.34 billion was contributed from its Indonesia operations; while 47.09% or RM4.4 billion was attributable to Malaysia businesses.

CIMB Group close seven sen or 1.48% lower at RM4.67 today, giving it a market capitalisation of RM40.94 billion.