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JAKARTA. The country’s fifth largest bank by assets PT Bank CIMB Niaga reported 33 percent surge in net profits in 2012, thanks to fee-based income and manageable operational cost amid modest growth in lending.
CIMB Niaga booked Rp 4.23 trillion (US$439 million) in net profits in 2012, a significant increase compared to Rp 3.17 trillion a year earlier.
“The driver of the increase was higher fees based income by 29 percent,” CIMB Niaga finance director Wan Razly Abdullah said on Thursday, referring to Rp 3.17 trillion in non interest income the company reaped last year.
He also said the company was able to manage the increase in operational costs at 15 percent, which helped the company book higher net profits despite slower net interest income. The company’s net interest income grew by 22 percent last year to Rp 9.71 trillion versus Rp 7.93 trillion year on year.
CIMB Niaga’s lending rose by 16 percent to Rp 145.4 trillion in 2012 compared to a year earlier. The bank’s lending growth in 2012 was lower than its achievement in 2011, where it reported 20 percent increase in loan disbursement compared to 2010.
The bank’s lending growth was also lower than the increase in national credits, which according the central bank reached 22.96 percent.
Wan said that CIMB Niaga expected to book a further 16 percent increase in lending this year.
“We are expecting the same level. We are also expecting that disbursement of corporate credits will get better as we have seen a good trend in the pipeline, perhaps due to better global economic outlook and better expected commodity prices,” he said.
Corporate loans, which contributed about 30 percent of the bank’s total lending, increased by only 9 percent in 2012 to Rp 43.52 trillion, far slower than other sectors of consumer and commercial loans.
Wan attributed the slow growth in corporate lending to world economic slow down and the poor commodity market in 2012.
Commercial loans, which contributed 40 percent to CIMB Niaga’s total loans, rose by 22 percent to
Rp 57.77 trillion. Meanwhile, lending to consumers, which contributed about 30 percent to total loans, rose by 14 percent to Rp 44.1 trillion.
As part of its expansion plan, Wan said that CIMB Niaga, which is 97.94 percent owned by Malaysia’s CIMB Group, would continue to open new branches, improve automatic teller machine (ATM) network and perform inorganic growth.
Wan said the bank was considering entering the general insurance sector by acquisition. He said that the bank had received 10 proposals from local and international insurance companies.
“They are being studied by the board of directors,” Wan Razly said.
Shares in CIMB Niaga (BNGA) were closed at Rp 1,400 apiece on Thursday, surging by 11 percent compared to Rp 1,260 a day earlier. (Raras Cahyafitri/ The Jakarta Post)
