Indonesia's CIMB Niaga enjoys increased profits due to fee income

CIMB Niaga reported 33 percent surge in net profits in 2012.

Its net profits in 2012 of Rp 4.23 trillion (US$439 million) increased from Rp 3.17 trillion a year earlier.

This is largely attributed to fee-based income and manageable operational cost amid modest growth in lending.

“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 trilliono 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.

Wan said that CIMB Niaga expected to book a further 16 percent increase in lending this year.

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.

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