Therefore, Commercial Banking Commercial decided to focus its work program in 2013 by:
• Increasing CASA funds through enhanced customer account transactions, either as part of financing requirement terms or encouraging debtors to select us as their main bank for transacting business.
• Facilitating customer needs for more convenient business activities and for business expansion plans into the ASEAN Region to optimize CIMB Group’s Regional Desk through Networking Events, Business Matching, and Market Checking.
• Continuing the success of the dual banking concept through the optimization of the potential of both branch and commercial banking staffs to market both
• Encouraging a variety of activities that can generate fee-based revenue, especially from trade finance transactions made by commercial customers as well as through the cross-selling efforts to promote products such as BizChannel@CIMB and CIMB@work in collaboration with Transaction Banking units and synergies with other directorates to provide comprehensive services to customers.
• Utilizing a customer’s network value chain from business activities to increase in low cost funds (CASA).
• Providing faster Service Level Agreement (SLA) processes through the Business Credit System successfully launched in 2012.
• Monitoring Asset Quality to maintain a sound level of non-performing loans (NPL).
In financing, Commercial Banking‘s strategy to focus on certain industrial sectors and offer faster loan processing through the Business Credit System has been implemented properly allowing the loan volume to reach Rp33,837 billion, or showing an increase of 7% from 2012.
While loan volume grew satisfactorily, Commercial Banking remained focused on asset quality. A strategy adopted in 2013 was to maintain asset quality including through strict monitoring of debtors classified on the watchlist, collect overdue receivables and coordinate with the Asset Recovery
& Restructuring Unit to resolve old NPLs and prevent new ones. Efforts made by Commercial Banking successfully kept NPLs at 2.2% by the end of 2013.
Meanwhile, funding in Commercial Banking in 2013 reached Rp27,985 billion and despite showing a decrease of 2.2%
over the previous year it showed a much better funding structure as evidenced by larger composition of low-cost funds, which grew from 29.3% in 2012 to 36.8 % in 2013.
This better funding structure was supported by an increase in the CASA ratio that grew 22.6% to Rp10,288 billion in 2013.
On the other hand, fee-based income primarily from trade finance transactions also grew significantly at a 61% annual rate from the previous year. Looking ahead, to further encourage the accumulation CASA accounts, Commercial Banking will intensify cooperation with Transaction Banking to encourage larger volumes and numbers of transactions,
Ronald Akili
Owner of PT Tiga Rasa, PT Casa Jati Padang and PT Isa Development
Bank CIMB Niaga has been our business partner since we first began our business in Jakarta in 2009. This partnership has gone well because the CIMB Niaga can help us expand and optimize our business with its wide product and service offerings. As we opened our new business in Bali in 2010, this relationship extended. And as our business has grown, CIMB Niaga has been there to offer a range of additional products tailored to the needs of our business.
Our relationship with CIMB Niaga is more than business ties between a bank and its customers, but has become a familial relationship; we get to know almost everyone that works at CIMB Niaga who interacts every day with us, from tellers to Directors.
It is our hope that this well-nurtured relationship to complement each other can be extended and I am sure we can grow together to reach the next level of growth.
To improve the performance of trade finance, Commercial Banking will focus on how to improve the competence of people who are in charge of handling transactions and that of marketing personnel, while continuing to encourage product innovation in international trade finance.
Commercial Banking also managed to cut overhead costs by prioritizing productive spending and applying a tight cost control system starting within the smallest unit in order to contribute positively to higher profitability.
Supporting function
Established within the Commercial Banking organizational structure is a supporting function called Business Product
& Strategic Development (BPSD) to facilitate Commercial Banking portfolio development through business transactions and those of potential industries, develop integrated funding products and payment services for commercial customers, and contribute to process improvement while also preparing Commercial Banking strategy.
In 2013, this support function was able to support financing and funding activities in Commercial Banking. By applying the concept of the value chain supported by the availability of financing products that can facilitate business activities between larger corporations or between principals and distributors, contractors or dealers in the downstream business chain, it is expected that low cost funds in Commercial Banking will increase.
In addition, in order to improve the credit process. The Company continued to develop its Business Credit System (BCS) to adopt the latest technological developments, one of which is through the virtual Private Network (VPN) application.
OUTLOOK 2014
Going forward, Commercial Banking will grow in line with the Company’s strategic direction planned for 2014. Commercial Banking will seek opportunities and continue to build synergies. 2014 will be a year with numerous opportunities in which we are likely to see continued improvements of the Indonesian economy, increased levels of purchasing power and growth of household consumption. Challenges to be faced in 2014 will be due to the unrecovered global economy still characterized by uncertainties, pressures from the estimated fall of the BI benchmark rates and heated socio-political situation due to the upcoming general and presidential elections.
Growth targets set for 2014 have been stated, and these present challenges for Commercial Banking. To achieve these targets, Commercial Banking has prepared the following strategies:
• To maximize revenue per customer by increasing added value to customers, encouraging customers to use more of our products and striving to be the main bank for customers both in their business activities and in the individual relations.
• Penetrating new markets while building stronger and deeper business relationships with existing customers.
• Expanding the distribution network to reach more customers.
• Improving the quality of human resources through training and programs specifically designed to meet the needs of Commercial Banking.
• Conducting initiatives in order to maintain Asset Quality.
• Expanding the scope and range of financing product bundling and payment services to be offered to commercial customers demonstrating potential for larger CASA funds.