challenging economic situation, reflected in a net profit of Rp1.8 trillion.
Business Segment Review
Corporate Banking’s loan increased by 7.7% yoy to Rp69.6 trillion
7.7%
11.6%
3. Being active in conducting loan syndications by well managing loan risk, in order to increase revenue.
4. Human resources development through a series of certification training programs.
5. Infrastructure improvement to drive growth in Corporate Banking.
6. Maintaining loan quality management.
7. Increasing the portion of sharia financing.
PERFORMANCE IN 2017
In 2017, Corporate Banking continued to grow in the face of tight market competition and a challenging economic situation, as reflected in a 150.8% increase in profit before tax to Rp1.8 trillion, compared with Rp0.7 trillion in 2016. The significant growth in profit before tax in 2017 was supported by the 12.7% increase in net
as reflected in the decline of the non-performing loan ratio.
Loans and Syndicated Loans
In 2017, Corporate Banking (including Treasury) recorded continuing loan growth. Syndicated loans amounted to Rp45.9 trillion in 2017, with CIMB Niaga contributing 15%. Among some of the more significant loan facilities were those given to PT Agro Multi Persada Tbk., PT Plaza Indonesia Realty, PT Parabandung Propertindo, PT Ti-Phone Mobile Indonesia Tbk., PT Kereta Api Indonesia, PT Waskita Karya Tbk.
The composition of working capital loans accounted for 53.1% of total Corporate Banking loans in 2017, while investment loans reached 46.9%. Loan growth
CORPORATE BANKING
number of strategic initiatives, such as market and economic sector diversification, focus on customer segmentation, and strengthening of synergies with CIMB Group entities.
Corporate Banking Loans (Rp trillions)
Working Capital Loans Investment Loans
60.1 64.6 69.6
28.7
31.4
30.0
34.6
36.9
32.7
17 16
15
Loan Quality
CIMB Niaga consistently focuses on improving loan quality by disbursing loans to industry sectors and market leader customers with proven track records and good prospects in 2017. In addition, CIMB Niaga also implemented a number of strategic initiatives to improve loan quality, through restructuring loans and closer monitoring of the loan portfolios. Through these strategic initiatives, CIMB Niaga succeeded to decrease the non-performing loan ratio in the Corporate Banking segment to 2.5% in 2017, down from 3.1% the previous year. CIMB Niaga will continue to apply the principles of prudential banking and risk management principles in disbursing its loans.
4.5% 3.1%
2.5%
NPL Gross Ratio (%)
17 16
15
Customer Deposits
In 2017, CIMB Niaga implemented a customer deposits strategy that focused on increasing the amounts of CASA from corporate customers and bank and non- bank financial institutions. Increased CASA means that the customer deposits will be more sustainable in the long term, and allows CIMB Niaga to offer more competitive rates to its customers.
As a result of this strategy, total customer deposits at Corporate Banking (including Treasury) in 2017 amounted to Rp36.5 trillion, up 8.6% from Rp33.6 trillion in 2016. Customer deposits growth was driven by the 11.6% growth in CASA compared with previous year.
CASA in the Corporate Banking segment amounted to Rp17.7 trillion, an increase of Rp1.8 trillion compared to the Rp15.9 trillion in the previous year. Meanwhile, the CASA ratio at the end of 2017 was at 48.5%, representing an improvement from 47.2% in 2016.
All this is in line with CIMB Niaga’s customer deposit strategy to focus on increasing CASA amounts.
Customer Deposits (Rp trillions)
CASA Time Deposits
30.3 33.6 36.5
12.7
17.6 17.7 18.8
15.9 17.7
17 16
15
Corporate Banking improved coordination with related units such as Transaction Banking, Corporate Funding, Financial Institutions and Non-Bank Financial Institutions in order to encourage higher account balances in customer current accounts.
HUMAN RESOURCES MANAGEMENT
Human Resources (HR) is also an important element that supports business growth. CIMB Niaga manages its human resources by mobilizing all existing resources and capabilities to respond to challenges and adapt to the competitive banking industry. In coordination with related units, Corporate Banking seeks to enhance the knowledge and competencies of its human resources through structured training programs focusing on improving loans competences, building industry-specific knowledge with due consideration to compliance and risk, and reducing employee turnover to maintain efficiency and continuously revitalize human resources. In addition, specific development programs meet business needs both in managerial competences and leadership, including through professional hires to fill key positions at all levels in the Corporate Banking organization.
PLANS, FOCUS AND STRATEGY FOR 2018
Corporate Banking’s plan, focus and strategy in 2018 to achieve business opportunities and growth while anticipating risk include:
1. Increasing the portion of loans to state owned enterprise (SOE) customers in anticipation of increased government funding for infrastructure projects.
2. Expanding the sharia customer base in order to increase sharia financing portfolios.
3. Increasing fee-based income through activities in syndicated loans.
4. Expanding customer portfolios through cross- selling with Cash Management, Investment Banking, Trade Finance, and Treasury products.
5. Developing human resources through training programs.
6. Improving asset quality through a more exacting debtor selection process.
BOARD OF DIRECTORS PT Plaza Indonesia Realty Tbk
Plaza Indonesia Realty is a real estate developer with a vision of developing high-quality and prestigious properties in premium locations.
Personally, I have known CIMB Niaga since the time of Plaza Indonesia Realty’s establishment in 1983. Since 2010, the Company has partnered with CIMB Niaga, benefiting from their responsive, flexible, appropriate services as well as competitive banking products.
In our opinion, CIMB Niaga’s products and services provide mutual benefits while suitably fulfilling the operational needs of our Company. Going forward, we envision further opportunities for partnership between the Company and CIMB Niaga to be explored towards an even better relationship.