KUALA LUMPUR (July 30): PT CIMB Niaga Tbk, CIMB Group Holdings Bhd's 92.5% indirectly-held unit, reported a net profit of 2.1 trillion rupiah (RM623.31 million) for the first half of 2021 (1H21), which is 22.22% higher than 1.74 trillion rupiah in the previous year (1H20).

This translated into a higher earnings per share of 85.54 rupiah for 1H21 against 1H20’s 69.99 rupiah, according to a statement issued by CIMB Niaga that CIMB filed with the stock exchange today.

CIMB Niaga president director Tigor M Siahaan said the group registered an increase in return on equity (ROE) to 11.2% in tandem with the increase in net profit by 22.2% year-on-year (y-o-y) to 2.1 trillion rupiah.

The strong growth in net profit was fueled by an increase in operating income of 8.7% y-o-y while operating expenses were generally flat, resulting in an improvement in CIMB Niaga’s cost-to-income ratio to 45.1%. Loan loss provision inched higher by 5.1%, according to Tigor.

“Despite the encouraging 1H21 results, we remain cautiously optimistic in light of the resurgence of Covid-19 outbreak. We remain focused on growing the bank’s business with the execution of our five-Pillar Strategy whereby we engage our customers with our best banking services, supported by digital transformation and data analytics,” he added.

CIMB Niaga’s capital adequacy ratio (CAR) and loan to deposit ratio (LDR) were strong at 22.1% and 78.4% respectively, with total assets of 288.9 trillion rupiah as at June 30, 2021 — which keeps CIMB Niaga as the second-largest privately-owned bank by assets in Indonesia.

Total deposits stood at 218.1 trillion rupiah with the CASA ratio of 62.4%, as both current account and savings account grew by 8.2% y-o-y and 10.5% y-o-y respectively, driven largely by the bank’s continuous commitment to digital enhancement and customer experience.

“As Indonesia's leading digital bank, we continue to innovate and improve our OCTO Mobile capabilities by evolving it into a super app. The app enables users to enjoy our banking services securely and safely, especially during the current Restrictions on Social Activities (PPKM) period. Our customers are able to conduct many banking activities such as savings, transactions, investments, and loans at the convenience of their own homes,” Tigor said.

It was estimated that 96% of total customer financial transactions were made through digital banking channels such as OCTO Mobile, OCTO Clicks, BizChannel@CIMB, Automated Teller Machines (ATMs) and Rekening Ponsel (mobile wallet) as at June 30, 2021,

Total loans stood at 173.4 trillion rupiah, contributed mainly from 5% y-o-y growth in the consumer banking segment. Mortgages also grew by 7.3% y-o-y and auto loans rose by 12.6% y-o-y.

“In line with our strong support for the sustainable development goals, CIMB Niaga recently launched two sustainable financing initiatives which were sustainability-linked loan/financing and sustainable financing. The new financing initiatives have placed CIMB Niaga at the forefront of the country's banking industry and as one of the pioneers in the banking industry to offer products that are socially and ecologically sustainable with positive contributions to the environment,” Tigor added.

In the Sharia banking segment, CIMB Niaga's Islamic Business Unit (CIMB Niaga Syariah) maintains its position as the largest Islamic business unit in Indonesia, with total financing valued at 33.1 trillion rupiah and deposits at 37.1 trillion rupiah as at June 30, 2021.

To support its business growth, CIMB Niaga continues to improve customer experience by offering a comprehensive suite of products and services through 428 customer touch-points (including 33 mobile branches and 37 Digital Lounges).

At the time of writing, CIMB shares slipped 1.54% or seven sen to RM4.48 today, giving it a market capitalisation of RM44.86 billion.