JAKARTA. PT Bank CIMB Niaga Tbk (CIMB Niaga; IDX: BNGA) today reported an unaudited consolidated net profit of Rp1.95 trillion for the first six months of 2014, down 8.5% from Rp2.13 trillion reported during the same period in 2013. This translates to earnings per share (EPS) of Rp77.7 and a return on equity (ROE) of 14.5%.


The decrease in net profit is mainly due to a narrow increase in net interest income of 4.0% Year on Year/YoY and lower fee income of Rp1.51 trillion (5.9% lower YoY) as a result of challenging operating conditions. CIMB Niaga maintains its position as the fifth largest bank in Indonesia with total assets of Rp224.84 trillion, up 11.2% compared to Rp202.20 trillion for the same period previous year.

President Director of CIMB Niaga Arwin Rasyid said, "Amidst the difficult business climate, with tightness in liquidity, weak Rupiah, rising interest rates, as well as the impact of the general and presidential elections, CIMB Niaga continued to grow its assets in tandem with its ability to raise deposits at reasonable costs, and closely monitor asset quality."

As at end of June 2014, CIMB Niaga's loan book stood at Rp164.66 trillion, a growth of 9.1% YoY. Of the total loans, consumer loans showed a decelerating growth, Small Medium Micro Enterprise (SMME) loans recorded 15.3% YoY growth to Rp33.32 trillion and Corporate loans grew by 11.7% YoY to Rp47.09 trillion.

With a variety of competitive deposit products, including the newly launched Tabungan Pendidikan Xtra savings products in April 2014, CIMB Niaga managed to record deposits growth of 10.6% to Rp165.83 trillion as at end June 2014. The Current Account and Savings Account (CASA) increased by 12.0% YoY to Rp75.49 trillion, while Time Deposits and Structured Deposits were 9.4% higher YoY, resulting in a 58 basis points/bps YoY increase in CIMB Niaga's CASA ratio to 45.5%.

CIMB Niaga was able to contain operating expenses growth to 8.6% YoY, in line with inflation and minimum wage levels in Indonesia. The lower operating income resulted in a higher cost to income ratio of 51.66% for the 6 months ended 30 June 2014.

The weaker macroeconomic conditions have had an impact on asset quality with CIMB Niaga recording a gross non-performing loan/NPL ratio of 2.97% as at 30 June 2014, compared to 2.25% as at the same period a year ago. This increase emanated from the Commercial Banking and the Corporate Banking segments which rose to 4.23% and 3.37% respectively, as at 30 June 2014 (up 237 bps YoY and 24 bps YoY).

CIMB Niaga maintained its Capital Adequacy Ratio (CAR) at 16.08% as at 30 June 2014, an increase of 19 bps from the same period last year of 15.89%.

For syariah banking, CIMB Niaga's Islamic Business Unit's (CIMB Niaga Syariah) total financing stood at Rp6.06 trillion with third-party deposits of Rp5.19 trillion as at 30 June 2014.

Branchless banking supports business growth
Arwin added that given the increasingly competitive environment, banks have to be more creative and efficient in strategizing their business growth. Therefore, CIMB Niaga continues to optimize the most advanced technologies in developing digital features for its branchless banking services, including upgrading its core banking system to support future business growth.

As evidence of CIMB Niaga's digital initiatives success, offerings such as the CIMB Clicks, Go Mobile and the innovative Rekening Ponsel (mobile wallet), continued to see increasing number of users. The number of CIMB Clicks users grew by 29.8% YoY, reaching 888,000 active users while Go Mobile reached 684,000 users, an increase of 77.2% YoY. In addition, the number of Rekening Ponsel users increased by 523.5% YoY to 505,000 users.

"We will continue to innovate our digital platform, as part of our strategy to increase customer deposits and fee-based income," Arwin ended.

Networks expansion

To support its business growth, CIMB Niaga continues to improve customer experience by offering a full range of products and services through 971 branch offices as at 30 June 2014 (including 20 mobile branches). The nationwide networks operate 3,194 automated teller machines (ATMs), 560 cash deposit machines (CDMs) and 184 self-service terminals (SSTs).

Recognitions
Throughout the first half of 2014, CIMB Niaga received various awards including the first place for both The Best Sharia Unit and Top Growth Financing Sharia Unit, for assets of Rp1 trillion and more in "The 10th Islamic Finance Award" by Karim Consulting, as well as the first place for Digital Brand of the Year 2013 in the Digital Sharia Business Unit Brand category awarded by Infobank magazine.

Recently, CIMB Niaga was also honored with the Corporate Image Award 2014, in the Medium Asset National Bank (Asset 100 - 250 Trillion) category by the Frontier Consulting Group, and one of the Best Managed Companies in Indonesia by Finance Asia. In addition, CIMB Niaga also received the Social Business Innovation Award 2014, for the Best Sustainable Business Innovation Company category in Green Credit Programme by Warta Ekonomi magazine.

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