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Jakarta Post

Citibank Indonesia's net profit jumps 70 percent despite shrinking loan disbursement

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Fri, November 15, 2019   /   01:20 pm
Citibank Indonesia's net profit jumps 70 percent despite shrinking loan disbursement Citibank Indonesia country controller Pranidi Wangsa (left), country treasurer Suryadi Ong (second left), CEO Batara Sianturi (second right), and CFO Warren Huang converse after a publication of the bank's financial performance publication in Jakarta on Nov. 14, 2019. (JP/Dionnasius Aditya)

Private lender Citibank NA, Indonesia posted a net profit of Rp 2.4 trillion (US$170.51 million) in the first nine months of the year, a 70 percent jump from the same period last year.

Citibank CEO Batara Sianturi said the increase in profit was driven by increases in the bank’s non-interest income and net interest income, as well as a lower cost of credit.

"We managed to close the third quarter with a solid financial performance [...] the three factors have contributed to the bank's profit growth," he said during a press briefing in Jakarta on Thursday.

However, the bank's loan disbursement shrank 7.84 percent year-on-year (yoy) to Rp 44.8 trillion as of September.

“[We] project a 10 percent decrease in loan disbursement [until the end of the year],” Batara said. "The lower loan portfolio occurred mainly in the financial intermediary, mining and communication sectors but we compensated for the [loan] growth in the trade and processing industries."

Bank Indonesia's (BI) latest data show that bank lending slowed to 8.59 percent yoy in August, the weakest growth rate in almost two years and lower than the 9.58 percent rate in July.

BI Governor Perry Warjiyo explained that the slump in corporate loan demand hampered the country’s lending growth as businesses were in a wait-and see-mode given the global economic and geopolitical uncertainties.

Meanwhile, Citibank Indonesia's capital adequacy and asset quality remained robust, with a capital adequacy ratio (CAR) of 25.51 percent, while its non-performing loan was recorded at 2.53 percent.