Allowance for Impairment Losses (6,131) (7,420) (8,129) 21.0 9.5
Loans & Consumer Financing Receivables – Net 170,526 170,117 172,035 (0.2) 1.1
Fixed Assets – Net 2,485 3,362 6,752 35.3 100.8
Other Assets – Net 12,223 12,248 12,058 0.2 (1.6)
Total Assets 233,162 238,849 241,572 2.4 1.1
Current Account 39,224 40,444 44,598 3.1 10.3
Saving Account 39,166 43,123 47,211 10.1 9.5
Time Deposit 96,332 94,966 88,763 (1.4) (6.5)
Total Customer Deposits 174,723 178,533 180,571 2.2 1.1
Deposit from Other Banks 2,067 5,654 4,557 173.6 (19.4)
Securities Issued and Subordinated Loans 8,774 9,443 6,387 7.6 (32.4)
Borrowings 8,815 6,685 5,436 (24.2) (18.7)
Other Liabilities 10,337 9,855 10,413 (4.7) 5.7
Total Liabilities 204,715 210,170 207,364 2.7 (1.3)
Total Equity 28,448 28,679 34,208 0.8 19.3
Total Liabilities and Equity 233,162 238,849 241,572 2.4 1.1
As of the end of 2016, the Company recorded asset growth of +1.1% with a total of Rp241.6 trillion compared to Rp238.8 trillion in the prior year. The 2016 increase was mainly due to an increase in fixed assets of Rp3.4 trillion, up by +100.8% compared to 2015. In addition, the asset growth was also driven by the increase in loans of +Rp2.6 trillion or increasing by +1.5% in 2016.
Securities and government bonds also increased by +Rp2.0 trillion, up by +7.8% compared to 2015. The asset growth strengthened the Bank’s position as the 5th largest bank in Indonesia in terms of assets. The Company also recorded growth in customer deposits of +Rp2.0 trillion or up +1.1% compared to prior year in which time deposits accounted for the largest at 49.2%
of total customer deposits in 2016.
Loan
In 2016, total loans - gross distributed provided by the Bank amounted to Rp180.2 trillion. The amount increased by +1.5% compared to the 2015 balance of Rp177.5 trillion. Our conservative loan growth aligned with the Bank’s strategy to focus on quality during its loan distribution activities rather than quantity, to minimize placing low quality loans. To improve loan growth, the Bank has expanded its loan provision by creating innovative products, which are more competitive, offering loans with more competitive interest rates and executing other marketing strategies.
The 2016’s loan growth resulting from these measures has preserved the Bank’s position as the fifth largest bank in terms of loan distribution.
Loans by Currencies
In 2016, the composition of loans based in Rupiah and foreign currencies was at recorded at 86.1%
and 13.9%, respectively, which changed moderately compared to prior year profile of Rupiah 85.7%
and foreign currencies 14.3%. Loans denominated in Rupiah stood at Rp155.1 trillion or up by +1.9%
compared to Rp152.1 trillion in the prior year. Whereas loans denominated in foreign currencies amounted to Rp25.1 trillion, down by -1.3% from Rp25.4 trillion in the prior year. The focus on increasing the growth in Rupiah-denominated loans and decreasing foreign currency-denominated loans reflected a part of the risk management strategies in response to the weakening Rupiah exchange trend during 2016.
Financial Performance Review
Loan Composition by Currencies (%)
86.1 % 13.9 %
85.7 % 14.3 %
81.2%
18.8%
2014 2015 2016
Foreign Currencies Rupiah
As depicted in the table of Loans by Currencies and Average Interest Rate, the average interest rate of Rupiah- denominated loan in 2016 decreased to 11.7% from 12.6% in 2015. The decreasing interest rate enabled the Bank to provide a more competitive interest rate corresponding with BI 12 month rate. In 2016, the BI 12 month rate has decreased by -150 basis points to 6.0% as of the end of 2016 compared to 7.5% at the end of 2015.
Breakdown of Loan by Currencies and Average Interest Rate
Loan by Currencies and Average Interest Rate
Rp trillion 2014 2015 2016 Change (%)
2014-2015 2015-2016
Rupiah 143.4 152.1 155.1 6.1 1.9
Average Interest Rate (%) 12.8 12.6 11.7 (0.2) (0.9)
Foreign Currencies 33.3 25.4 25.1 (23.7) (1.3)
Average Interest Rate (%) 5.6 4.6 4.6 (1.0) (0.1)
Total 176.7 177.5 180.2 0.5 1.5
Loans by Geographical Area
By geographic distribution, the Bank’s loan disbursements were concentrated in Java, where 85.0% of the of the total loans distributed during 2016 were made. Within Java, the Jakarta region accounted for 64.5% of total loans, followed by East Java with 10.1%.
Composition of Loan by Geographical Area (%)
Jakarta East Java Sumatera Central Java West Java East Indonesia Others
64.5% 10.1%
8.1% 5.8%
4.5%3.3%3.7%
Breakdown of Loan by Geographical Area
Breakdown of Loan by Geographical Area
Rp trillion 2014 2015 2016 Change (%)
2014-2015 2015-2016
Jakarta 108.4 108.4 116.2 0.1 7.2
East Java 17.6 18.8 18.2 6.8 (3.2)
Sumatera 16.3 14.6 14.5 (10.1) (0.7)
Central Java 11.8 12.4 10.5 5.3 (15.6)
West Java 10.6 9.5 8.2 (10.8) (13.8)
East Indonesia 4.7 6.9 5.9 47.9 (14.4)
Others 7.3 6.8 6.6 (6.5) (3.3)
Total 176.7 177.5 180.2 0.5 1.5
Loan by Type of Utilization
The Bank’s working capital loans in 2016 stood at Rp85.2 trillion or decreasing by -3.1% compared to Rp87.9 trillion in the prior year, while investment loans reached Rp48.5 trillion, up by +8.0% when compared to Rp44.9 trillion in 2015. Consumer loans also increased, by +3.8%
to Rp46.5 trillion from Rp44.7 trillion in 2015.
Working capital loans, at 47.3%, accounted for the largest portion of total loans provided by the Bank in 2016, followed by investment loans which accounted for 26.9% and consumer loans for 25.8% of the Bank’s total loans.
Loan by Type of Utilization (Rp trillion)
Consumption Investment Working Capital
Total
48.9% 49.5% 47.3%
26.7% 25.3% 26.9%
24.3% 25.2% 25.8%
176.7 177.5 180.2
Loan by Economic Sector
The largest contribution by economic sector was made by manufacturing at 20.4%, up from 19.3% in 2015, followed by trading, restaurants, hotels and administration at 20.2%, almost flat with 2015 at 20.0%
and business services at 16.2%, up from 15.1% in 2015.
Composition of Loan by Economic Sector (%)
Manufacturing Trading, restaurants, hotels and administration Business services Housing Consumer Agriculture Others
20.4%
20.2% 16.2%
13.0% 12.2
7.4% 10.7%
Breakdown of Loan by Economic Sector
Loan by Economic Sector
Rp trillion 2014 2015 2016 Change (%)
2014-2015 2015-2016
Manufacturing 29.5 34.3 36.7 15.9 7.3
Trading, restaurants, hotels and administration 38.2 35.6 36.4 (6.9) 2.4
Business services 28.0 26.7 29.1 (4.6) 9.0
Housing 22.5 23.6 23.3 4.9 (1.0)
Consumer 19.9 20.0 21.9 0.2 9.7
Agriculture 16.5 15.9 13.3 (3.4) (16.4)
Others 22.0 21.5 19.3 (2.3) (10.2)
Total 176.7 177.5 180.2 0.5 1.5
Loan by Segment
By business segment, corporate banking represented 33.9% of total loans disbursed by CIMB Niaga, or up +7.1% to Rp61.0 trillion in 2016 compared to Rp56.9 trillion in 2015. This was followed by consumer banking, which contributed 28.5% to the Bank’s total loans, or down by -1.4% to Rp51.4 trillion compared to Rp52.2 trillion in 2015.
Financial Performance Review
Composition of Loan by Segment (%)
Corporate Banking Commercial Banking MSME Banking Consumer Banking
33.9%
18.4% 19.2%
28.5%
Breakdown of Loan by Segment
Loan by Segment*
Rp trillion 2014 2015 2016 Change (%)
2014-2015 2015-2016
Corporate Banking 55.4 56.9 61.0 2.7 7.1
Commercial Banking 36.1 34.2 33.2 (5.1) (3.0)
MSME Banking 34.9 34.2 34.5 (2.0) 1.0
Consumer Banking 50.3 52.2 51.4 3.8 (1.4)
Total 176.7 177.5 180.2 0.5 1.5
* Including Sharia Banking
Corporate banking loans increased by +7.1% in 2016 to Rp61.0 trillion, accounting for 33.9% of total loans disbursed by CIMB Niaga and up from Rp56.9 trillion in 2015, followed by MSME banking loans, which grew by +1.0% to Rp34.5 trillion compared to the prior year’s activity of Rp34.2 trillion, which accounted for 19.2% of total loan portfolio.
Non-Performing Loan
The global economic downturn made its impact on the
As of the end of 2016, mining industry customers recorded an increase in non-performing loans ratio of +3.0% to 7.2%, up from 4.1% in 2015. The deterioration in loan quality in mining sector was followed by a weakening of loan quality in the transportation, warehouse and communication industry of +1.0% to 4.8%, up from 3.8% in 2015, and the manufacturing industry which was up by +0.9% to 3.4% compared to prior year at 2.5%.
NPL Ratio by Industry (%)
Total Industry Manufacturing Mining Transportation, warehouse, and communication
2014 2015 2016
2.2
2.5
3.4
1.9
2.5
2.9
2.5
4.1
7.2
3.2 3.8 4.8
The deteriorating loan quality in several economic sectors have made direct impact on the quality of loans disbursed by the Bank. Total non-performing loans or NPL increased by Rp0.3 trillion to Rp6.9 trillion in 2016, up from Rp6.6 trillion in 2015. This has resulted in the higher gross NPL ratio of 3.9% in 2016, up from 3.7% in 2015.
By business segment, NPL ratio of corporate banking improved from 4.5% in 2015 to 3.3% in 2016, yet NPL of consumer and commercial banking increased to 2.7% from 2.0% in 2015 and 6.8% from 6.0% in 2015, respectively, followed by MSME banking at 3.7%, up from 2.9% in 2015.
NPL Ratio (%)
Consumer Banking Total
MSME Banking Commercial Banking Corporate Banking
2014 2015 2016
3.9% 3.7% 3.9%
1.7% 2.0% 2.7%
2.4% 2.9% 3.7%
3.3% 6.0% 6.8%
7.3%
4.5% 3.3%
Loan by Collectability (%)
Pass
Special mention Sub-standard Doubtful
89.6% Loss
6.50.6% % 0.3% 3%
Composition of NPL by Economic Sector
Composition of NPL by Economic Sector 2014 2015 2016 Change (%)
Rp billion % Rp billion % Rp billion % 2014-2015 2015-2016 Trading, restaurants, hotels and administration 1,928.2 28.0 1,608.2 24.2 2,132.2 30.8 (16.6) 32.6
Business services 1,223.4 17.8 1,439.7 21.7 1,524.1 22.90 17.7 5.9
Manufacturing 1,094.3 15.9 1,347.1 20.3 1,494.8 21.6 23.1 11.0
Housing 561.4 8.1 531.7 8.0 577.7 8.4 (5.3) 8.6
Consumer 263.3 3.8 270.2 4.0 490.5 7.1 2.6 81.5
Transportation, warehouse, and communication 493.7 7.2 252.1 3.8 216.3 3.1 (48.9) (14.2)
Agriculture 27.9 0.4 196.0 3.0 215.4 3.1 602.8 9.9
Social services 66.5 1.0 387.6 5.8 158.4 2.3 482.7 (59.1)
Construction 109.4 1.6 354.4 5.3 61.1 0.9 223.9 (82.8)
Mining 920.6 13.4 233.8 3.5 40.2 0.6 (74.6) (82.8)
Electricity, gas, and water 204.2 3.0 14.7 0.2 5.5 0.1 (92.8) (62.5)
Total 6,892.9 100.0 6,635.5 100.0 6,916.0 100.0 (3.6) 4.2
By economic sector, total NPL from trading, restaurants and hotel accounted for the highest level of NPL at 30.8% in 2016, up from 24.2% in 2015, followed by business services at 22.0% from 21.7% in 2015.
Impaired Loan
In 2016, impaired loans increased by 5.9% to Rp9.4 trillion compared to prior year of Rp8.9 trillion. This resulted in an increase in the impairment ratio from 5.0% in 2015 to 5.2% in 2016.
Financial Performance Review
Allowance for impairment losses was increased in 2016 to Rp8.1 trillion from 7.4 trillion in 2015.
Allowance for Impairment Losses (Rp billion)
Balance Dec 15 7,420
Additional Provision 4,574
Recovery 172
Writen-off (3,896)
Others* (141)
Balance Dec 16 8,129
* Include differences of exchange rate