By developing a comprehensive branchless service platform, Transaction Banking
managed to post an increased income
growth, and an improved program activation and service quality for all of its customer
groups.
The year 2014 showcased the outstanding performance of Transaction Banking supporting CIMB Niaga’s business growth through Cash Management, Remittance, Trade Finance, and Value Chain.
This encouraging performance was accomplished by employing the strategy of acquiring more large corporations - both local and multi national companies (MNC) - and through customer loyalty programs, product campaigns, new product development, brand awareness & competitiveness enhancement, as well as continuous improvements in service standards.
In 2014, Transaction Banking has secured some deals with numbers of large-sized corporates, key players in their respective industries, for providing cash management and trade finance services. Each of the deals have been strengthened through penetration into the value chains services, . by linking the value chains to their down line distributors/
retailers in order to capture end-to-end business opportunities, therefor CIMB Niaga will be their main bank in clearing/ settlement service large-sized corporates clients, particularly in the FMCG and infrastructure industries.
Transaction Banking has undertaken various initiatives to meet customer banking needs through the Multigiro programs for IDR and USD. The Multigiro is a checking account with a program offers discounts for each transaction made on the condition the account holds a minimum amount of funds set by the Bank.
Transaction Banking continues to make various of innovations to meet customer increasingly complex needs. In addition to pioneering Bank Payment Obligation (BPO) product development in Indonesia for Trade Finance products, the Bank has also developed cash management products such as new feature developments in internet banking for corporate segments, BizChannel@CIMB including FX Deal Online allowing customer to make forex transactions online, and the implementation of revenue generation module2 (MPN G-2) allowing customer to make tax payments online thus mitigating the risk of double payment. The most recent innovation in Transaction Banking, the Plug n Pay, allows customers to use their smart phones to make any transaction usually performed on an EDC machine. Hence, the increase level of users’ mobility.
Besides product development, Transaction Banking focuses on building strategic relationships with other banks to improve banking services, and providing trade line facilities that can be used as a low-cost source of funds for trade finance.
In business remittance, Transaction Banking has secured the cooperation of several domestic and foreign financial institutions, to date with 20 Money Transfer Operators, the Bank expanded network on remittance services, particularly for Indonesian workers making a living overseas.
In order to enhance brand awareness and market competitiveness, Transaction Banking, in association with one of the leading financial magazines in Asia Pacific, has held an event about ”supply chain business development in ASEAN”, attended by national and international practitioners.
Further, Transaction Banking ran numerous promotional activities at selected CIMB Niaga branches in Indonesia to promote products and acquire new customers.
Transaction Banking prides itself on providing quality service to consumers. In 2014, we improved our customer service by developing the Bank’s Trade Finance System though updating of our Bank Trade System. The latest version of the Bank Trade System has been designed to meet even the most complex of our customers’ needs effectively and efficiently.
PT ABC President Indonesia was established in 1991 as a joint venture between PT ABC Central Food and Uni- President Enterprise Corporation. ABC brand are widely known in the food and beverage market in Indonesia with excellence and quality. In our day-to-day operational activities, our products and services are supported by CIMB Niaga, especially CIMB Direct Channel Solution integrated with our supply chain, as well as BizChannel
@ CIMB for cash management purposes. Both products are proven effective and very useful in supporting our business.
On this occasion, we would like to thank the CIMB Niaga Transaction Banking team on the excellent services, including in responding to our needs and questions.
We highly recommend CIMB Niaga to partners and our stakeholders.
Novita Kwee
Chief Financial Officer PT ABC President Indonesia
This achievement was supported by our reliable eChain system, a supply chain electronic banking solutions which able to connect trading activities in their business’ chain communities. Besides this, the improvement on value chain services to clients was another contributing factor to our success. In that, business models were developed for distributor financing and continual improvement on the quality of its human resources. Successful expansion in joint-cooperation with numerous MNC clients especially Asian MNCs were harnessed by CIMB Group franchise as well as solid CIMB Niaga branding as the largest foreign- owned bank in Indonesia.
Trade Finance’s working capital loan increased significantly by 127.1% from the previous year, a much higher growth than the increase of loans working capitals in the industry.
Loan growth was confirmed by a sharp increase of 49.5% in revenue from the previous year.
Value Chain business has also achieved highly. This is evidenced by the 21.1% rise in working capital loans and the 60.2% rise in third party funds from the previous year.
This feat was supported by business expansion through the acquisition of new principals and their distributors.
Cash Management continues to display consistent performance year after year. This is evidenced by the growing number of customers who use our corporate internet banking channel, the Bizchannel@CIMB. The number of transactions conducted through this channel increased by 18.3% from the previous year.
Likewise, Remittance exhibited quite a satisfactory progress.
This business area has been driven by innovations, such as the SpeedSend that allows overseas remittance services to retail segment. The number of transactions conducted through this channel increased by 28.8% from the previous year.
Awards
The awards received by CIMB Niaga from prominent magazines testified Transaction Banking’s consistent efforts to provide the best solutions to its customers:
• The Best Cash Management Bank in Indonesia from The Asian Banker Transaction Banking Awards 2014.
• The Best Cash Management Bank in Indonesia from Asian Banking & Finance Magazine 2014.
• Best Trade Finance in Indonesia from The Asset Asian Awards 2014.
• Best Trade Finance in Indonesia from Trade Finance Award during the Excellent Award 2014.
Focus in 2015
For 2015, Transaction Banking will continue to focus on increasing CASA as a source of low-cost funding, increasing working capital through Trade Finance and Value Chain, and generating fee-based income. The key initiatives shall include:
• Continuing to cross sell Transaction Banking products to CIMB Niaga’s existing customers, especially those with current loans facility.
• Harnessing our relationship with the CIMB Group to acquire business from the Asian and ASEAN MNCs, especially potential businesses in the ASEAN region.
• Increasing CASA by penetrating the retail segment as part of business chain development of our existing principals and distributors.
• Developing new products and innovating business solutions by adding value and creating better customer experience, thus becoming a leader in product innovations.
• Expanding business through strategic relationships with partners having extensive network and infrastructure.
Thus developing the network and remittance services customers, especially those beyond the bounds of CIMB Niaga branches.
Business and Operations Report
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.