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Jakarta Post

Economy in brief: CIMB Niaga'€™s profit lowered in 2015

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Fri, February 26, 2016   /  09:01 am

Jakarta: Publicly listed CIMB Niaga, part of Malaysia'€™s CIMB financial group, saw in its net profit decline last year due to the impacts of the country'€™s sluggish economy and global uncertainty.

According to its financial report published on Wednesday, the bank posted Rp 428 billion (US$31.9 million) in consolidated net profit in 2015, an 81.7 percent drop from the Rp 2.34 trillion it booked a year earlier.

The drop in net profit was lower than in 2014, when it posted 45.3 percent decrease year-on-year (yoy) from 2013.

CIMB Niaga president director Tigor Siahaan said the weak regional economy and challenging business conditions had impacted the bank'€™s performance last year as it saw a rise in bad loans, which saw provisional costs increase by 54.7 percent yoy.

By the end of last year, CIMB Niaga, which is the country'€™s fifth largest bank in terms of assets, managed to reduce its gross non-performing loans (NPLs) to 3.74 percent, from 3.9 percent in 2014.

'€œLast year was very challenging for the bank, but our core business continued to grow as our net interest income increased by 6.5 percent from a year earlier,'€ Tigor said in a statement on Wednesday.

With a rise in bad loans, he said the bank had also increased its loan-loss coverage ratio to 111.5 percent last year, from 88.78 percent in 2014.

Facing challenges last year, the bank booked flat loan growth of 0.6 percent to Rp 177.3 trillion by the end of 2015, of which 32 percent and 30 percent, or major portions, were contributed by corporate and consumer lending, respectively.

The bank'€™s third-party funds grew slightly by 2.2 percent yoy to Rp 178.5 trillion, which was mainly supported by 6.6 percent growth in low-cost funds.

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