CIMB Niaga focuses on strategic initiatives to help develop and accelerate the growth of Sharia banking while improving asset quality, increasing the productivity of
human resources and maintaining Sharia compliance.
Indonesia’s economy weakened in 2014, causing uncertainties that delayed business investments. This situation also had an impact on the growth of the Sharia banking industry, which historically has been real sector-driven. In addition, the internal consolidation of large Sharia banks also had an unfavorable impact on smaller Sharia banks.
By the end of December 2014, the Sharia banking industry recorded a 12.4% increase in assets, a 8.3% increase in Financing Provided (PYD), and a decrease of third party funds collected from 24.4% in 2013 to 18.7% in 2014. Meanwhile, Non Performing Financing (NPF) increased to 4.3% in 2014 from 2.6% in 2013. On the other hand, the industry’s CAR improved from 14.4% in 2013 to 16.1% in 2014.
CIMB Niaga Syariah in 2014
The Sharia business faced more or less the same business climate as that experienced by the conventional banking sector. A number of regulatory policies issued in 2013, especially regarding down payment for indent homes and motor vehicles, had weakened the performance of consumer financing. Meanwhile, Indonesia’s economic slowdown in 2014 also affected demand for financing in the commercial and corporate sectors.
The company is engaged in the healthcare service, managing the operations of “Budi Mulia” Maternal and Child Hospital. X manages his RSIA with his wife, dr.
Rizalya Dewi, SpA.
Our relationship with CIMB Niaga Syariah began in January 2013 when we opened checking accounts at the Bank’s Pekanbaru office. We were later offered an iB investment financing facilities for the purchase of shop house, land and the equipments for our hospital.
Praise to Allah, since then our business has developed strongly. Our previously tiny clinic has become one of the most prestigious maternal hospitals in Pekanbaru.
We are accepting an increasing number of patients today, and were very pleased when the grandchild of Pekanbaru mayor was given birth to at our hospital. Now we have acquired more land for the hospital, which is ready to be to expand our hospital.
We use almost all products of CIMB Niaga, from checking accounts, savings accounts, financing, payroll, EDC and Syariah gold card. The CIMB Clicks especially gives us more comfort to make financial transactions. We are becoming more satisfied with services and personal relations of the staff of CIMB Niaga Syariah. We believe that we can still develop our business further so we are looking forward to expanding it with more support from CIMB Niaga when we think it’s the right time to do so. That should enable us to grow bigger as has CIMB Niaga Syariah.
dr. Budi Mulyana, SpOG Direktur
PT Riau Mulia Mitra Medika
Rp9.8 trillion in December 2013 to Rp8.5 trillion in December 2014. However, the figure represents an increase of 15.6%
from the previous quarter, which totaled Rp7,3 trillion. The largest decline in assets was due to a decrease in non- financing, which was the decline of d 36.3% in placement at BI from 2.2 trillion in 2013 to Rp1.4 trillion in 2014. In terms of financing, the largest decline came from a decrease of 38.5% in Mudharaba financing from Rp303 billion in 2013 to Rp186 billion by the end of 2014. Despite the decline, CIMB Niaga Syariah retained its number 8 ranking among industry players.
By the end of 2014, CIMB Niaga Syariah was supported by a range of comprehensive products and services tailored to meet the needs of all customer segments, including:
14 savings products, 10 financing products with 7 models of financing, 8 Card & Merchant Business products and services, 9 Transaction Banking and Trade Finance products, and 7 Sharia Treasury products.
Strategic Focus in 2014
In 2014, CIMB Niaga Syariah focused on several strategic initiatives to support business development, including:
• Optimizing the implementation of the Dual Banking Leverage model to help reach larger business volume, including by utilizing CIMB Niaga’s electronic banking platform.
• Encouraging financing growth through the enhancement of the product and new schema and program
• Encouraging increased low-cost funds (CASA) by optimizing the Bank’s existing network, among others.
• Improving asset quality through restructuring and collection efforts.
• Improving the competence and productivity of human resources.
• Maintaining Sharia compliance.
earlier. The largest contributor to this decline was the consumer segment, which declined from Rp3.9 trillion in 2013 to Rp3.5 trillion in 2014. Commercial and MSME segments also recorded a decline of respectively Rp267 billion (down by 29.8%) and Rp283 billion (down by 23.2%).
However, the corporate segment grew significantly by 116.3% in 2014 from Rp633 billion in 2013 to Rp1.4 trillion in 2014. Overall, the growth of financing in 2014 was slower than in 2013 due to weaker performance of the real sector during 2014.
To maintain the performance of its financing portfolio, CIMB Niaga Syariah launched a number of new and enhancement the existing products in 2014. These include: the murabaha cap with a floating margin scheme, IMBT for commercial and corporate customers,
In order to maintain the quality of its productive assets, CIMB Niaga Syariah worked closely with the ARR Team to restructure and collect non performing financing. In addition, efforts to collect marginal accounts were also increased throughout the year. At the end of 2014, the Gross NPF was recorded at 4.8% and Net NPF at 1.84%. Ratio of Gross NPF in 2014 increased from 3.6% in 2013 as a result of a decrease in the quality of consumer and corporate financing.
Third Party Funding
In 2013, the Indonesian Government, through the Ministry of Religious Affairs, appointed CIMB Niaga Syariah as one of the Beneficiary Banks of Hajj Travel Expenses Savings (BPS BPIH) for both Regular and Special Hajj. Later in 2014, CIMB Niaga Syariah launched a number of new products, namely Tabungan Pahala Haji and Tabungan Rencana Haji to raise public funds from the hajj segment. The products, among others, have encouraged growth in CIMB Niaga Syariah’s third party funds, which reached Rp6.8 trillion at the end of 2014, up by 4.6% from 6.5 trillion a year earlier and grew 38.7% from 4.9 trillion in the previous quarter.
The performance of Tabungan Pahala Haji and Tabungan Rencana Haji has a positive impact on the CASA in 2014.
Efforts to increase CASA were supported by aggressive marketing campaigns and cooperation with CIMB Niaga’s other business units.
and services through both the Sharia Branch Office (KCS) and the Conventional Branch Office (KCK), which can also provide Sharia services (Office Channeling or OC), as well as Rahn service outlets.
As of the end of 2014, CIMB Niaga Syariah had 30 KCS (including 1 KCPS), 526 OC and Rahn outlets, down from 30 KCS, 534 OC and 97 Rahn outlets in 2013. In 2015, CIMB Niaga Syariah is planning to promote cooperation between its 286 Mikro Laju offices to market Hajj Savings products.
Sharia customer access will be supported by CIMB Niaga Branchless Banking, including ATM, SST, CDM, CIMB Clicks, Go Mobile, Preferred Phone Banking and Rekening Ponsel.
Improving the capacity of Human Resources (HR) was one of CIMB Niaga Syariah’s development focuses in 2014. Working closely with the Learning and Talent Development (LTD) Unit, CIMB Niaga organized a series of training programs relating to the DBLM concept, and Sharia banking products and services. The program aims to equip all employees with adequate Sharia knowledge in order to increase cross-selling efforts and encourage the growth of CIMB Niaga Syariah’s business performance. The DBLM concept was also socialized among members of BOD and CIMB Niaga’s entire senior management at Executive Training sessions.
Looking ahead, Sharia trainings will become mandatory for CIMB Niaga’s employees in order to maximize the benefits arising from the implementation of the DBLM concept.
To enhance employee productivity, the structure of Unit Usaha Syariah of CIMB has been re-organized to optimize the implementation of DBLM concept.
CIMB Niaga Syariah also continued to support the 1P project initiative in Information Technology to allow smooth integration of its business processes into CIMB Niaga’s core banking system, and to promote access to more accurate and multi-dimensional data and information.
Increased employee productivity was also achieved through the application of a ‘reward and punishment’ system.
CIMB Niaga Syariah monitors the implementation of Sharia principles through the activities of the Sharia Supervisory Board (DPS), which is updated daily by the Sharia Advisory Group. In the future, CIMB Niaga Syariah is planning to establish a comprehensive Governance Framework.
The Bank’s Sharia compliance activities in 2014 included:
• Intensively educating employees about the importance of compliance with all applicable regulations and Sharia principles.
• Managing the DSN and PBI database, and the provisions of FSA.
• Periodically reviewing all business processes, product processes, reporting systems across all business units and support units, and distribution channels (OC & KCS).
• Performing audits of all business processes related to the implementation of Sharia compliance.
Rewards
In 2014, CIMB Niaga Syariah earned numerous awards, including:
• Islamic Finance Award & Cup 2014 KARIM Consulting Indonesia (First Rank for The Best Sharia Unit)
• Islamic Finance Award & Cup 2014 KARIM Consulting Indonesia (First Rank for Top Growth Financing)
• Islamic Finance Award & Cup 2014 KARIM Consulting Indonesia (Rank 2 for Top Growth Funding)
• Islamic Finance Award & Cup 2014 KARIM Consulting Indonesia (Rank 3 for The Most Efficient)
• Indonesian Bank Loyalty Award (IBLA) 2010-2014 (Savings Account, Islamic Banking)
• Indonesian Bank Loyalty Award (IBLA) 2010-2014 (Loyalty Program for Savings Account, Islamic Banking)
• Service Excellence Award 2014 Infobank (Rank 3rd for Sharia Unit Best Overall Performance)
• Service Excellence Award 2014 by Infobank (Rank 2nd for Best Teller Performance)
• Service Excellence Award 2014 by Infobank (Ranked 2nd for Customer Service Best Performance)
• Service Excellence Award 2014 by Infobank (Ranked 2nd for ATM Best Performance)
These awards demonstrate CIMB Niaga Syariah’s ability to compete, grow and make a significant contribution to the Bank.
development spaces to support the sharia banking growth.
In an effort to make the most of available opportunities, CIMB Niaga Syariah is planning to focus on the distribution of financing and funding activities.
Financing will focus on the commercial, SME and consumer mortgage segments because these sectors are expected to grow at a faster rate than other sectors. This is primarily due to the expected increase in the number and percentage ratio of businesses, and the likely growing demand for houses and motor vehicles. In anticipation of this, CIMB Niaga has to develop attractive products specifically tailored to the needs of its customers, which will be packaged in MMQ, IMBT and murabaha cap (floating margin) schemes.
In funding, Tabungan Haji is targeted to make a major contribution to CASA. There is also a plan to launch 2 flagship CASA products in the second quarter of 2015.
Optimization of branchless banking and the Sharia Card is also expected to increase the Bank’s transaction volume with a long-term increase in the balance of funds.
2014 0.4
2013 0.5
2012 0.4
Net Interest Income (Rp trillion)
2014 6.8
2013 6.5
2012 7.0
Customer Deposit (Rp trillion)
2014 6.4
2013 6.6
2012 7.6
Loan (Rp trillion)
2014 4.6
2013 4.2
2012 2.0
Non Performing Ratio (%)
2014 95
2013 164
2012 135
Profit Before Tax (Rp billion)
2014 7.10
2013 6.19
2012 7.80
Net Interest Margin (%)