The local arm of Malaysian banking group CIMB earned a consolidated net income of $139 million from January to June. (Photo courtesy of Bank CIMB Niaga)

CIMB Niaga's Net Income Soars as Loan Quality Improves

AUGUST 16, 2019

Jakarta. Bank CIMB Niaga, the fifth-largest lender by assets in Indonesia, booked a 12 percent increase in net income in the first half of this year, thanks to a growing net interest income and a drop in its loan loss provision.

The local arm of the Malaysian banking group CIMB earned a consolidated net income of Rp 1.98 trillion ($139 million) in the January to June period, the company said in a statement on Thursday. 

That put CIMB Niaga's earnings at Rp 79 per share. The lender's shares were traded at 7.4 times its trailing-twelve-months' earnings. 

The lender's net interest income – interest gained from lending money after subtracting interest paid to customers – rose by 5.5 percent to Rp 6.32 trillion.

"Amid a challenging economic condition, we managed to reduce our provision cost by 2 percent year on year," Tigor M. Siahaan, CIMB Niaga's president director, said in the statement. 

The bank's total loans grew 2.6 percent to Rp 190.5 trillion, supported by growth in housing loans, credit cards and small and medium business loans, which went up by 14 percent, 10 percent and 4.1 percent respectively. 

Its corporate loans also grew by 2.1 percent. 

"We will continue to prioritize the precautionary principle related to credit growth in accordance with current conditions while still paying attention to asset quality as a top priority," Tigor said.

CIMB Niaga's total third party fund rose 2.3 percent to Rp 197.85 trillion with current account and saving accounts – which accrue lower interest for the lender compared to time deposit accounts – accounting for 54 percent of the fund.

The lender reported consolidated total assets of Rp 271.86 trillion at the end of June, up 4.5 percent from a year ago. CIMB Niaga remains the second largest national private bank in Indonesia in terms of assets, after Bank Central Asia. 

CIMB Niaga's capital adequacy ratio was at 20.6 percent at the end of June, up 199 basis points from a year ago.


 

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