STATEMENTS OF FINANCIAL POSITION
Statements of Financial Position
Rp billion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Cash and Cash Equivalent - Net 27,077 22,656 32,307 (16.3) 42.6
Marketable Securities and Government Bonds – Net 26,046 28,071 38,414 7.8 36.8
Loans – Gross 177,537 180,164 185,135 1.5 2.8
Allowance for Impairment Losses (7,420) (8,129) (7,317) 9.6 (10.0)
Loans – Net 170,117 172,035 177,818 1.1 3.4
Fixed Assets – Net 3,362 6,752 6,660 100.8 (1.4)
Other Assets – Net 12,247 12,058 11,106 (1.5) (7.9)
Total Assets 238,849 241,572 266,305 1.1 10.2
Current Accounts 40,444 44,598 49,281 10.3 10.5
Savings Accounts 43,123 47,211 50,214 9.5 6.4
Time Deposits 94,966 88,762 89,822 (6.5) 1.2
Total Customer Deposits 178,533 180,571 189,317 1.1 4.8
Deposits from Other Banks 5,654 4,557 6,884 (19.4) 51.1
Marketable Securities Issued and Subordinated Loans
9,443 6,387 16,379 (32.4) 156.4
Borrowings 6,685 5,436 5,810 (18.7) 6.9
Other Liabilities 9,855 10,413 10,964 5.7 5.3
Total Liabilities 210,170 207,364 229,354 (1.3) 10.6
Total Equity 28,679 34,208 36,951 19.3 8.0
Total Liabilities and Equity 238,849 241,572 266,305 1.1 10.2
ASSETS
At the end of 2017, CIMB Niaga recorded asset growth of 10.2%, representing a total of Rp266.3 trillion compared to 2016’s Rp241.6 trillion. The 2017 assets growth was mainly due to marketable securities and government bonds growth by 36.8% or Rp10.3 trillion compared to 2016. In addition, asset growth was supported by cash and cash equivalents growth by 42.6% or Rp9.7 trillion compared to 2016, and loans growth by 2.8%, or Rp5.0 trillion compared to 2016.
The asset growth strengthened CIMB Niaga’s position as Indonesia’s fifth largest bank.
Cash and Cash Equivalent
CIMB Niaga recorded a 42.6% increase in net cash and cash equivalent to Rp32.3 trillion in 2017, mainly due to a 247.2% increase in placements with Bank Indonesia. This account balance amounting to Rp12.5 trillion, increased by Rp8.9 trillion compared to Rp3.6 trillion in 2016. The placements with Bank Indonesia growth was mainly due to Bank Indonesia’s Deposit Facility (FASBI) growth by Rp7.1 trillion compared to 2016.
Current Accounts at Bank Indonesia decreased 13.5%
from 2016 to become Rp11.5 trillion in 2017. However, CIMB Niaga’s Demand Deposits at Bank Indonesia remain in compliance with the Statutory Reserve Requirement (GWM) as amended by Bank Indonesia PBI No.19/6/PBI/2017 dated 18 April 2017, whereby the minimum primary Statutory Reserve Requirement is
Cash and Cash Equivalent (Rp trillion)
0.7 5.2 2.3
14.6
4.3 27.1
0.8 3.6
3.4 1.6 13.3
22.7
0.8 12.5
3.6 11.5
3.9 32.3
Placements with Other Banks Placements with Bank Indonesia Current Accounts at Other Banks Current Accounts at Bank Indonesia Cash
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Marketable Securities and Government Bonds – Net Investor confidence in Indonesia’s economic growth has improved and was seen in Indonesia’s sovereign debt rating improving to investment grade, based on Standard & Poor’s rating, and this followed other international rating agencies that had previously positioned Indonesia within the investment grade category, making Indonesia’s bond market more attractive. In line with these conditions, CIMB Niaga also increased its investment in government bonds in 2017 to Rp25.0 trillion, or increased by Rp6.8 trillion compared to Rp18.2 trillion in the previous year.
Marketable Securities and Government Bonds – Net
Rp billion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Marketable Securities 9,821 9,344 13,443 (4.9) 43.9
Government Bonds 16,050 18,184 24,971 13.3 37.3
Securities Purchased under Resale Agreements 175 543 - 210.3 (100.0)
Total 26,046 28,071 38,414 7.8 36.8
Out of the total of Rp25.0 trillion in government bonds in 2017, composition for held-to-maturity government bonds reached 30.6%, while available-for-sale and trading reached 56.9% and 12.5%, respectively. The available-for-sale bonds also recorded a high growth at 77.5%, increasing to Rp14.2 trillion in 2017.
Government Bonds (Rp trillion)
Trading Available-for-sale Held-to-maturity
17 16
15
16.1 18.2 25.0
4.6
6.3 5.2
3.0
8.0
7.2
3.1
14.2
7.7
Based on maturity period, the structure of the government bonds portfolio of CIMB Niaga was dominated by government bonds with a maturity period of more than 1 year ≤ 5 years, reaching 55.8% of total government bonds. The government bonds with a maturity period more than five years contributed 18.6% of the total government bonds of CIMB Niaga, equivalent to Rp4.7 trillion.
Government Bonds by Maturity Period (Rp trillion)
16.1 18.2 25.0
> 5 years > 1 - 5 years > 3 - 12 months > 1 - 3 months 1 month 6.9
4.4 0.43.7 0.7
4.7
13.9
3.7 1.9 0.8 6.1
6.8 4.3 0.8 0.2
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FINANCIAL PERFORMANCE REVIEW
On the other hand, CIMB Niaga’s investments in marketable securities was still dominated by available-for-sale securities in 2017. Available-for-sale securities recorded at Rp11.2 trillion in 2017 while held-to-maturity securities amounted to Rp1.3 trillion, while trading securities amounted to Rp959.0 billion. Available-for-sale securities grew by 41.7% from 2016’s figure of Rp7.9 trillion.
Marketable Securities - Gross
Rp billion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Held-to-maturity 1,258 962 1,307 (23.5) 35.9
Available-for-sale 7,776 7,916 11,215 1.8 41.7
Trading 825 502 959 (39.2) 91.0
Total 9,859 9,380 13,481 (4.9) 43.7
There were no securities under resale agreements in 2017, compared to the 2016 position of Rp543.0 billion.
Loans
CIMB Niaga recorded loans amounting to Rp185.1 trillion, or increasing by 2.8% compared to 2016 at Rp180.2 trillion, in line with the improvement of Indonesia’s economic growth in 2017. In addition, the moderate loans increase was aligned with CIMB Niaga’s strategy to more selective in determining the loan quality by tightening underwriting standard.
CIMB Niaga also conducted loan expansion by creating innovative new products which are more competitive, offering loans with more competitive interest rates, and executing other loan marketing strategies.
Loans by Currencies
During 2017, CIMB Niaga’s loans were still dominated by loans denominated in Rupiah, with Rupiah and foreign currency composition at 85.6% and 14.4%, respectively. This was relatively unchanged compared to the loans composition in 2016, with a ratio of loans denominated in Rupiah to foreign currencies was recorded at 86.1% and 13.9%.
Loan Composition by Currency (%)
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Foreign Currencies Rupiah 85.7%
14.3%
86.1%
13.9%
85.6%
14.4%
Loans Breakdown by Currencies and Average Interest Rate
Rp trillion 2015 2016 2017
Rupiah 152.1 155.1 158.4
Average interest rate (%) 12.6 11.7 10.9
Foreign Currencies 25.4 25.1 26.7
Average interest rate (%) 4.6 4.6 4.4
Total Loans - Gross 177.5 180.2 185.1
The declining of average interest rate of loans denominated in Rupiah to 10.9% in 2017 enabled CIMB Niaga to provide more competitive interest rates in line with the Bank Indonesia reference rate. As of 31 December 2017, the BI 7 Day Reverse Repo Rate was recorded at 4.25% with the deposit facility rate at 3.5%
and the lending facility rate at 5.0%, compared to the year end 2016 at 4.75%, 4.0% and 5.5%, respectively.
Loans by Geographical Area
Based on geographic distribution, the largest loan disbursements of CIMB Niaga’s loans in 2017 were concentrated on Java at 86.4%, with DKI Jakarta having the largest contribution at 65.5%, followed by East Java by 9.2%.
Loans by Geographical Area
Rp trillion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Jakarta 108.4 116.2 121.1 7.2 4.2
East Java 18.8 18.2 17.0 (3.2) (6.6)
Sumatera 14.6 14.5 15.5 (0.7) 6.9
Central Java 12.4 10.5 12.8 (15.3) 21.9
West Java 9.5 8.2 8.9 (13.7) 8.5
East Indonesia 6.9 5.9 6.0 (14.5) 1.7
Others 6.9 6.7 3.8 (2.9) (43.3)
Total 177.5 180.2 185.1 1.5 2.8
Jakarta East Java Sumatera Central Java West Java East Indonesia Others 65.5%
9.2%
8.4%
6.9%
4.8%3.2% 2.0%
Loans Composition by Geographical Area (%)
Loans by Utilization Type
The composition of CIMB Niaga loans in 2017 was well diversified, with working capital loans comprising the largest portion (53.0%), followed by consumption loans (24.7%) and investment loans (22.3%). Working capital loans grew by 15.3% to Rp98.2 trillion in 2017 compared to Rp85.2 trillion in 2016 supported by Indonesia’s economic growth.
Loans by Utilization Type
Rp trillion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Working Capital 87.9 85.2 98.2 (3.1) 15.3
Investment 44.9 48.5 41.3 8.0 (14.8)
FINANCIAL PERFORMANCE REVIEW
Loans by Economic Sectors
There are five types of economic sectors that consistently contribute above 10.0%. These are manufacturing; trading, restaurants, hotels &
administration; business services; housing; and consumption. The five sectors still comprised the largest of CIMB Niaga’s loans composition by economic sectors in 2017 with contributions of 21.1%, 21.0%, 14.3%, 13.7% and 10.4%, respectively.
Loan Composition by Economic Sectors (%)
Manufacturing Trading, Restaurants,
Hotels & Administration Business Services Housing Consumption Agriculture Others 21.1%
21.0%
14.3%
13.7%
10.4%
8.6%
10.9%
Loans by Economic Sector
Rp trillion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Manufacturing 34.3 36.7 39.0 7.0 6.3
Trading, restaurants, hotels, and administration 35.6 36.4 38.8 2.2 6.6
Business services 26.7 29.1 26.5 9.0 (8.9)
Housing 23.6 23.3 25.4 (1.3) 9.0
Consumption 20.0 21.9 19.3 9.5 (11.9)
Agriculture 15.9 13.3 15.9 (16.4) 19.5
Others 21.4 19.5 20.2 (8.9) 3.6
Total 177.5 180.2 185.1 1.5 2.8
Loans by Segment
Corporate banking represented 37.6% of CIMB Niaga’s loans, growing by 7.7% to Rp69.6 trillion in 2017, compared to Rp64.6 trillion in 2016. Followed by consumer banking which contributed by 26.3% to the CIMB Niaga’s loans or decreased by 6.7% to Rp48.6 trillion, compared to 2016’s position of Rp52.1 trillion. Commercial and MSME banking increased by 6.9% and 4.3%, respectively compared to 2016, to become Rp31.9 trillion and Rp35.0 trillion.
Loan Composition by Segment (%)
Corporate Banking Commercial Banking MSME Banking Consumer Banking
2017 2017
37.6%
17.2%
18.9%
26.3%
35.9%
16.6%
18.6%
28.9%
2016 2016
33.9%
17.6%
18.5%
30.0%
2015
2015
Non-Performing Loans
Total non-performing loans (NPL) decreased by Rp0.1 trillion to Rp6.8 trillion in 2017 compared to Rp6.9 trillion in 2016. This resulted in the gross NPL ratio of CIMB Niaga decreasing from 3.89% in 2016 to 3.75%
in 2017.
Loan Composition by BI Collectability (%)
Pass
Special Mention Sub-standard Doubtful Loss
91.7%
4.7%0.7%0.5% 2.5%
Overall, NPLs at CIMB Niaga improved in 2017. The NPL ratios of consumer banking, MSME banking, and corporate banking decreased in 2017 to 2.5%, 3.5%, and 2.5%, respectively. Commercial banking NPLs increased to 8.2% in 2017.
NPL Ratio (%)
3.89% 3.75%
2.7% 2.5%
2.1%
2.8%
3.6% 3.5%
7.6% 8.2%
6.0%
4.5%
3.1%
2.5%
3.74%
Total
Consumer Banking MSME Banking Commercial Banking Corporate Banking
By economic sectors, total NPLs from the trading, restaurants, hotels and administration sectors contributed the highest composition of NPL at 46.1% in 2017, followed by the manufacturing sector at 12.3% in 2017.
NPL Composition by Economic Sectors 2015 2016 2017 Growth (%)
Rp billion % Rp billion % Rp billion % 2015-2016 2016-2017
Trading, restaurants, hotels and administration
1,608.2 24.2 2,132.0 30.8 3,152.3 46.1 32.6 47.9
Manufacturing 1,347.1 20.3 1,494.8 21.6 841.4 12.3 11.0 (43.7)
Business services 1,439.7 21.7 1,524.1 22.0 688.6 10.1 5.9 (54.8)
Housing 531.7 8.0 577.7 8.4 651.4 9.5 8.7 12.8
Consumption 270.2 4.1 490.5 7.1 403.2 5.9 81.5 (17.8)
Agriculture 196.0 3.0 215.4 3.1 295.9 4.3 9.9 37.4
Social services 387.6 5.8 158.4 2.3 170.8 2.5 (59.1) 7.8
Construction 354.4 5.3 61.1 0.9 166.2 2.4 (82.8) 172.0
Transportation, warehouse and
communication 252.1 3.8 216.3 3.1 147.9 2.2 (14.2) (31.6)
Electricity, gas and water 14.7 0.2 5.5 0.1 3.8 0.1 (62.6) (30.9)
Mining 233.8 3.5 40.2 0.6 310.5 4.5 (82.8) 672.4
FINANCIAL PERFORMANCE REVIEW
Impaired Loans
In 2017, impaired loans declined by 0.1% to Rp9.4 trillion. This has resulted in a lower impaired loan ratio of 5.1% in 2017, down from 5.2% in 2016.
Allowance for impairment losses during 2017 amounting to Rp7.3 trillion, or decreasing by 10.0%, compared to Rp8.1 trillion in 2016.
Movements in Allowance for Impairment Losses (Rp billion)
Balance Dec 16 8,129
Additional provision 3,963
Loan recovery 398
Written-off (5,927)
Others* 754
Balance Dec 17 7,317
* Including differences of exchange rate
Asset Quality Committee
The assessment for impairment losses is performed on an individual basis (individual assessment) and collective basis (collective assessment).
Non Significant Loan OS<15 billion
Loan Collective Assessment
Loan Individual Assessment Significant Loan
OS>15 billion
Yes Yes
No
No Objective Proof
of Impairment Objective Proof
of Impairment Asset Quality
Committee Agreement
Collective Assessment is performed by evaluating the impairment of the loan groups based on the projected contractual cash flows, the levels of historical loss of each loan group, and the time lapsed from the point a detrimental incident occurs in a loan group to the point of objective evidence identification. Individual assessment is based on projected recoverable amounts from individual. Evaluation of Individual Assessment is carried out on a monthly basis and is decided by the Asset Quality Committee.
Asset Quality Committee consists of:
1. Chairman: Credit Director
2. Vice Chairman: Head of Loan Work Out (LWO) 3. Secretary: Head of Credit Committee Secretariat
& Delegation Authority Holder Management, Financial Accounting & Standards Group Head 4. Members: Director of Strategy and Finance,
Director of Business Banking, Director of Corporate Banking, Director of Sharia Banking and each with an appointed alternate from at least one level below the Board of Directors.
The roles and responsibilities of the Asset Quality Committee are to evaluate the quality of CIMB Niaga’s assets in line with CIMB Niaga’s overall risk appetite, including stipulating the names of debtors classified by Individual Assessment and determining the allowance for impairment losses to be established by CIMB Niaga. The function of an effective Asset Quality Committee are to improve asset quality and to reduce the growth of non-performing assets.
Fixed Assets
CIMB Niaga’s fixed assets were recorded at Rp6.7 trillion in 2017. The fixed assets decreased by 1.4%
compared to Rp6.8 trillion in 2016, mainly due to an increase in accumulated depreciation. As of 31 December 2017, CIMB Niaga’s fixed assets consist of buildings and motor vehicles, which were insured with PT Lippo General Insurance Tbk with total coverage of Rp3.7 trillion and USD129 million. During 2017, there were no fixed assets pledged by CIMB Niaga as loan collateral.
Other Assets
CIMB Niaga’s other assets decreased by 7.9% to Rp11.1 trillion in 2017, compared to Rp12.1 trillion in 2016. The decrease was mainly due to the decrease in acceptance receivables and derivative receivables by 6.7% and 40.0% to Rp4.2 trillion and Rp0.3 trillion compared to Rp4.5 trillion and Rp0.5 trillion in 2016.
LIABILITIES
CIMB Niaga diversified sources of its financing with customer deposits, deposits from other banks, borrowings and corporate bond issuance, besides focusing on low-cost funds such as demand deposits and savings accounts. In 2017, the third party funds of CIMB Niaga were well managed, as indicated by the increase of CASA ratio to 52.6% from 50.8% in 2016. In 2017, CIMB Niaga issued corporate bonds amounting to Rp4.0 trillion to support business expansion as a diversification of its sustainable financing resources.
Liabilities
Rp trillion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Customer Deposits 178.5 180.6 189.3 1.1 4.8
Deposits from Other Banks 5.7 4.6 6.9 (19.4) 51.1
Marketable Securities Issued 6.5 3.4 14.8 (47.7) 335.3
Subordinated Loans 3.0 3.0 1.6 - (46.7)
Borrowings 6.7 5.4 5.8 (18.7) 6.9
Other Liabilities 9.9 10.4 11.0 5.7 5.3
Total 210.2 207.4 229.4 (1.3) 10.6
Customer Deposits
CIMB Niaga recorded an increase in customer deposits amounting to Rp8.7 trillion in 2017, or a 4.8% increase compared to 2016. The increase was mainly due to the increase in low-cost funds derived from current accounts and savings accounts, which grew by 10.5% and 6.4% to Rp49.3 trillion and Rp50.2 trillion, respectively, compared Rp44.6 trillion and Rp47.2 trillion in 2016. Meanwhile, funds derived from time deposits also increased by 1.2% to Rp89.8 trillion in 2017, compared to 2016. Under such conditions, the CASA ratio increased to 52.6% in 2017 from 50.8% in 2016.
FINANCIAL PERFORMANCE REVIEW
Customer Deposits
Rp trillion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Current Accounts 40.4 44.6 49.3 10.3 10.5
Saving Accounts 43.1 47.2 50.2 9.5 6.4
Time Deposits 95.0 88.8 89.8 (6.5) 1.2
Total Customer Deposits 178.5 180.6 189.3 1.1 4.8
The increase in demand deposits is also supported by the BizChannel facility offered by CIMB Niaga. The BizChannel enables customers to manage funds and to make transactions easily and securely. The savings account increase is also an integral part of CIMB Niaga’s success in launching its savings products and promotional campaigns to generate public interest.
The time deposits growth was also supported by direct to customer promotions such as by providing an online time deposit facility that allows customers to open time deposit accounts simply by accessing CIMB Clicks without having to visit the branches.
Time Deposits by Contractual Period (Rp trillion)
> 12 months > 6 - 12 months > 3 - 6 months > 1 - 3 months 1 month 15.4
9.3 13.4
40.1 88.8 89.8 95.0
11.6 15.6
8.2 15.8
39.0 10.2 13.6
7.0 17.3
28.8
28.3
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Based on the contractual period, in 2017, the largest composition of time deposits was in the category of
> 1 - ≤3 months at 44.6%, followed by > 12 months at 17.1%, > 3 - ≤6 months stood at 15.0%, time deposits group of ≤1 month at 12.9%, and > 6 - ≤12 months at 10.4%.
Based on currencies, the composition of customer deposits is dominated by customer deposits denominated in Rupiah. The contribution of customer deposits in Rupiah was 79.0% or equivalent to Rp149.6 trillion in 2017, followed by foreign currencies was recorded at 21.0% in 2017 or equivalent to Rp39.7 trillion. In comparison, customer deposits in Rupiah and foreign currencies in 2016 amounted to Rp146.8 trillion and Rp33.8 trillion, respectively.
Customer Deposits by Currencies (%)
18.2%
81.8%
18.7%
81.3%
21.0%
79.0%
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Foreign Currencies
Rupiah
Average annual interest rate from customer deposits are as follows:
Average Interest Rate (%)
2015 2016 2017
Rupiah Foreign
Currencies Rupiah Foreign
Currencies Rupiah Foreign Currencies
Current Accounts 3.05 0.87 2.95 0.47 2.84 0.54
Saving Accounts 3.46 0.46 3.18 0.25 2.91 0.23
Time Deposits 8.69 1.59 7.27 0.98 6.19 1.20
Customer Deposits by Segment (%)
Consumer Banking Corporate Banking Commercial Banking MSME Banking 50.7%
19.3%
10.2%
19.8%
Based on business segment, consumer banking accounted for the largest proportion of customer deposits at 50.7% in 2017.
Customer Deposits by Segment
Rp trillion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Corporate Banking 30.3 33.6 36.5 10.9 8.6
Commercial Banking 23.5 18.9 19.3 (19.6) 2.1
MSME Banking 34.4 34.3 37.5 (0.3) 9.3
Consumer Banking 90.3 93.8 96.0 3.9 2.3
Total 178.5 180.6 189.3 1.1 4.8
The growth of customer deposits was noted in almost all business segments, whereby the highest percentage growth was recorded by MSME banking, which grew by 9.3% to Rp37.5 trillion in 2017. This was followed by corporate banking, consumer banking and commercial banking, increasing by 8.6%, 2.3% and 2.1%, resepctively in 2017.
Deposits from Other Banks
Deposits from other banks include demand deposits, saving accounts, interbank call money and time deposits.
In 2017, CIMB Niaga recorded deposits from other banks amounting to Rp6.9 trillion, higher than 2016’s position of Rp4.6 trillion. Out of the total Rp6.9 trillion, the portion of demand deposits and saving accounts accounted for 28.9%, with interbank call money and time deposits accounting for 71.1%.
Deposits from Other Banks
Rp trillion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Demand deposits and saving accounts 2.3 1.9 2.0 (17.4) 5.3
Interbank call money and time deposits 3.4 2.7 4.9 (20.6) 81.5
Total 5.7 4.6 6.9 (19.4) 51.1
Marketable Securities Issued and Subordinated Loans
In 2017, the composition of marketable securities issued and subordinated loans was as follows:
Marketable Securities Issued and Subordinated Loans
Rp billion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
FINANCIAL PERFORMANCE REVIEW
Marketable Securities Issued
CIMB Niaga issued Shelf Registration Bond II Bank CIMB Niaga Phase II Year 2017 and Shelf Registration Bond II CIMB Niaga Phase III Year 2017 amounting to each Rp2.0 trillion, respectively. Based on the issuance of these two bonds, the total securities issued in the end of 2017 amounted to Rp5.4 trillion, increasing by 66.9% compared to Rp3.2 trillion in 2016. The following is the summary of bonds issued by CIMB Niaga in 2017:
Name Nominal Value
(billion) Coupon Issuance Date Maturity Date
Shelf Registration Bond II Bank CIMB Niaga Phase II Year 2017
Series A (Rp802.0 billion)
6.75% 23 August 2017 3 September 2018 Series B
(Rp376.0 billion) 7.70% 23 August 2017 23 August 2020 Series C
(Rp822.0 billion)
8.15% 23 August 2017 23 August 2022 Shelf Registration Bond II Bank CIMB Niaga Phase
III Year 2017
Series A (Rp500.0 billion)
6.20% 2 November 2017 12 November 2018 Series B
(Rp657.0 billion)
7.50% 2 November 2017 2 November 2020 Series C
(Rp843.0 billion)
7.75% 2 November 2017 2 November 2022
Subordinated Loans
Outstanding subordinated loans of CIMB Niaga in 2017 came from the issuance of Subordinated Bonds II Bank CIMB Niaga Year 2010 amounting to Rp1.6 trillion. In the previous year, outstanding subordinated loans reached Rp3.0 trillion, which included outstanding Subordinated Bonds I Bank CIMB Niaga Year 2010 amounting to Rp1.4 trillion, which had not yet been due in 2016.
Securities Sold Under Repurchase Agreements
As of 31 December 2017, securities sold under repurchase agreements were recorded at Rp9.4 trillion, increasing by 55.5 times, compared to 2016. This increase mostly came from securities sold under repurchase agreements with Bank Indonesia as counterparty with nominal value by Rp7.0 trillion.
Borrowings
In 2017, CIMB Niaga’s borrowings amounting to Rp5.8 trillion, increasing by 6.9% from Rp5.4 trillion in 2016.
Borrowings
Rp trillion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
IDR 4.1 4.4 2.6 7.3 (40.9)
Foreign Currency (USD) 2.6 1.0 3.2 (61.5) 220.0
Total 6.7 5.4 5.8 (18.7) 6.9
In 2017, borrowings in Rupiah decreased by 40.9% compared to 2016, due to the payment of matured borrowing.
The decrease mostly came from borrowings from PT Bank Pan Indonesia Tbk which decreased to Rp528.1 billion, compared to Rp1.4 trillion in 2016. Borrowings from PT Bank Mandiri (Persero) Tbk also decreased to Rp275.7 billion from Rp1.1 trillion in 2016.
As of 31 December 2017, there was an increase in borrowings denominated in United States Dollars by 220.0% compared to the previous year. The largest increase were from Wachovia Bank, Bank of New York, NY and Standard Chartered Bank amounting to Rp1.2 trillion, Rp0.6 trillion and Rp0.5 trillion, respectively.
Other Liabilities
CIMB Niaga’s other liabilities in 2017 increased to Rp11.0 trillion, compared to Rp10.4 trillion in 2016.
The increase was mainly due to accrued expenses amounting to Rp2.2 trillion as of 31 December 2017, which increased compared to Rp1.9 trillion in the previous year. Accrued expenses mainly consist of expenses from third parties, unearned commissions and deposit accrued interest.
EQUITY
CIMB Niaga has been able to steadily record an increase in equity over the last three years. CIMB Niaga’s equity increased by 8.0% to Rp37.0 trillion in 2017 compared to Rp34.2 trillion in 2016. The strengthening
of CIMB Niaga’s equity was mainly supported by a 12.5% increase in retained earnings to Rp25.1 trillion, compared to Rp22.3 trillion in the previous year.
Retained earnings contributed the largest portion to CIMB Niaga’s equity of 67.8% in 2017. Meanwhile, the total issued and paid-up capital and additional paid-in capital were unchanged, standing at Rp1.6 trillion and Rp7.0 trillion, respectively.
On 25 July 2017, CIMB Niaga obtained approval from Financial Services Authority (OJK) through letter No.S- 63/PB.33/2017, to buy back CIMB Niaga’s shares (share buyback) to a maximum 2% of total shares issued and fully paid to be used as the Management Employee Stock Ownership Program (MESOP). The MESOP will be effective in 2018. As of 31 December 2017, the Bank performed a share buyback of 194,407,492 shares with an average price per share of Rp1,249.45 (full amount) with total buyback cost of Rp242.9 billion (including commission fees and taxes), recorded as treasury shock under CIMB Niaga’s equity.
Equity
Rp billion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Share Capital 1,612 1,612 1,612 - -
Additional paid-in capital 7,033 7,033 7,033 - -
Treasury shares - - (243) - na
Revaluation of fixed assets - 3,078 3,078 na -
General and Statutory Reserves 352 352 352 - -
Unrealized gain/(loss) on securities available for sale (601) (166) 26 (72.4) 115.7
Other equity 21 21 21 - -
Retained earnings 20,261 22,277 25,071 10.0 12.5
Non-controlling interest 1 1 1 - -
Total 28,679 34,208 36,951 19.3 8.0
FINANCIAL PERFORMANCE REVIEW
STATEMENTS OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
CIMB Niaga was able to record a net profit increase of 43.0%, to Rp3.0 trillion in 2017. Better interest and sharia expenses management, better asset quality and sustainable operational cost efficiency were the driving factors for CIMB Niaga’s profitability improvement in 2017.
Statements of Profit or Loss and Other Comprehensive Income
Rp billion 2015 2016 2017 Growth (%)
2015-2016 2016-2017
Interest and sharia income 22,319 21,325 20,403 (4.5) (4.3)
Interest and sharia expenses (10,933) (9,231) (8,000) (15.6) (13.3)
Net interest income - net 11,386 12,094 12,403 6.2 2.6
Other fees and commissions 1,718 2,113 2,135 23.0 1.0
Foreign exchange losses (395) (8) (51) (98.0) 537.5
Others 381 279 495 (26.8) 77.4
Total other operating income 1,704 2,384 2,579 39.9 8.2
Gains from trading financial instruments 501 397 330 (20.8) (16.9)
Gains from sale of marketable securities 145 284 444 95.9 56.3
Total income other than interest 2,350 3,065 3,353 30.4 9.4
Total income other than interest (BAU)* 2,350 2,789 3,353 18.7 20.2
Impairment losses on financial and non-financial assets (5,361) (4,973) (4,080) (7.2) (18.0)
Personnel expenses (4,156) (3,647) (3,948) (12.2) 8.3
General and administrative expenses (3,212) (3,513) (3,367) 9.4 (4.2)
Promotion expenses (315) (273) (254) (13.3) (7.0)
Total other operating expenses (7,683) (7,433) (7,569) (3.3) 1.8
Total other operating expenses (BAU)** (7,112) (7,433) (7,569) 4.5 1.8
Net operating income - net 692 2,753 4,107 297.8 49.2
Non-operating income/(expenses) – net (122) 98 48 (180.3) (51.0)
Income before income tax 570 2,851 4,155 400.2 45.7
Income tax expense (142) (769) (1,177) 441.5 53.1
Net income 428 2,082 2,978 386.4 43.0
Income before income tax (BAU) 1,141 2,575 4,155 125.7 61.4
Income tax expense (BAU) (285) (700) (1,177) 145.6 68.1
Net income (BAU) 856 1,875 2,978 119.0 58.8
Other comprehensive income after tax (196) 3,446 8 (1,858.2) (99.8)
Total comprehensive income 232 5,528 2,986 2,282.8 (46.0)
* Excluding income from strategic partners
** Excluding MSS personnel expense
Interest and Sharia Income
CIMB Niaga’s interest and sharia income came mostly from interest income from loans and earnings from sharia financing at 88.9% in 2017. This is an integral part of CIMB Niaga’s core business as a provider of financing in the Indonesian banking industry. In addition, interest income from marketable securities and government bonds accounted for 9.9% of total interest and sharia income in 2017.