3.89 3.75 3.11 NPL-gross ratio (%)
The following financial review refers to the Consolidated Financial Statements of PT Bank CIMB Niaga Tbk and subsidiary as of 31 December 2018 and for the year ended, prepared by the Bank’s Management in accordance with the Financial Accounting Standards in Indonesia, which audited by KAP Tanudiredja, Wibisana, Rintis & Rekan, a member firm PwC global network (Angelique Dewi Daryanto, S.E., CPA as partner in charge), an independent auditor, based on Standards on Auditing established by the Indonesian Institute of Certified Public Accountants, with unmodified audit opinion, as stated in its report dated 15 February 2019.
MAIN DISCUSSION
CIMB Niaga posted an asset growth of 0.18% to Rp266.8 trillion compare to 2017 of Rp266.3 trillion. The increase of asset was inline with achievement of loans distribution of Rp188.5 trillion or increased by 1.80%
from previous year of Rp185.1 trillion.
To supports its loans distribution in 2018, CIMB Niaga succesfully acquired Third Party Funds (TPF) of Rp190.8 trillion or increased 0.76% compare to 2017 of Rp189.3 trillion. This increase was supported by 0.86% increase in CASA to Rp100.4 trillion or equivalent to CASA ratio of 52.61% from its total customer deposits compare to CASA ratio 52.55% in 2017. Time deposits also increased by 0.64% to Rp90.4 trillion compare to 2017 of Rp 89.8 trillion. Other than TPF, CIMB Niaga also diversified its funding sources through issuance of debt securities by Rp2.0 trillion and subordinated loans of Rp150 billion in 2018.
CIMB Niaga also recorded and increase in non-interest income of Rp0.5 trillion to Rp3.8 trillion in 2018. With the increase of non-interest income by 13.84% and improvement of asset quality have caused a decline in Allowance for Impairment Loss provisions over
financial and non-financial by 25.74%, CIMB Niaga also managed to recorded an increase in net profit by 16.95% to Rp3.5 trillion in 2018 compare to 2017 of Rp3.0 trillion.
IMPACTS OF GLOBAL CONDITIONS ON COMPANY’S PERFORMANCE
In 2018, CIMB Niaga increased its net profit by 16.95%
to Rp3.5 trillion compare to 2017 of Rp3.0 trillion. This improvement was inline with Indonesia economic growth of 5.17%, higher compare to 2017 of 5.07%.
Improvement of Indonesia economic condition was supported by improvement of purchase power and declining of inflation rate in 2018 to 3.20% compare to 2017 of 3.81%, even though BI 7-Day Repo Rate increased by 175bps to 6.00% at the end of 2018 compare to previous year of 4.25%
BI raised its BI 7-Day Repo Rate in 2018 six times throughout 2018 to 6.00% at the end of 2018. This increased have a direct impact from gradual increment of interest rate by The Fed throughout 2018.
In the midst of competitive banking industry, in 2018 CIMB Niaga managed to maintain Bank’s position as the second largest private owned Bank by assets in Indonesia. To supports the growth of business, CIMB Niaga carried out a variety of initiatives and will continue to develop in order to achieve a sustainable growth.
ELECTRONIC NETWORK COVERAGE EXPANSION CIMB Niaga continuously provide the best services to more than 7 million Bank’s customers through 503 branch offices and network, 4,500 ATM, 954 CDM (including CRM) and 161 MFD with total headcount of 13,352 employees (including subsidiaries) throughout Indonesia. In 2018, CIMB Niaga has more than 26 Digital Lounges that served customer in many strategic
locations. Other than that, CIMB Niaga also have 27 units cash mobile to covered wider area. Follows are the details of CIMB Niaga’s electronic transaction network:
ATM dan MFD
At the end of 2018, CIMB Niaga owned 4,661 of total ATMs and MFDs with networks throughout Indonesia.
Total ATM and MFD machines were decreased by 13 units compare to previous year of 4,674 units.
2016 2017 2018
ATM dan MFD
4.1 88.0
83.4
4.7
88.2
4.7
126.8
Number of transactions (million)
Total ATM & MFD (thousand)
Transactions Volume (Rp trillion) 109.1
89.8
Despite the decrease in number of devices, however number of transactions at ATM machines were increased by 17.6 million transactions or 16.17% to 126.8 million transactions in 2018 (2017: 109.1 million transactions). In total of transations volume at ATM machines also increased to Rp89.8 trillion compare transactions volume in previous year of Rp88.2 trillion.
CDM
During 2018, total of CDM machine that owned by CIMB Niaga has reached 954 units. The number of CDM machines increased by 180 units compared to previous year (2017: 774 units).
2016 2017 2018
CDM
0.8 9.7
15.6
0.8
16.4
1.0
16.3
Number of transactions (million)
Total CDM (thousand)
Transactions Volume (Rp trillion) 11.3
21.0
The number of transactions through CDM machines increased by 5.0 million transactions or increased by 43.86% to 16.3 million transactions compared to previous year of 11.3 million transactions. The increased in total transactions led to the increased in transactions volume of Rp4.6 trillion or increased by 27.77% to Rp21.0 trillion during 2018.
Financial Performance Review
CIMB Clicks
CIMB Clicks as the internet-based flagship banking services that provided by CIMB Niaga has 1.7 million users at the end of 2018. This number increased by 13.33% compared to previous year of 1.5 million users.
Number of customer’s transactions through CIMB Clicks has reached 18.8 million transactions in 2018 or increased by 18.75% compare to previous year. The increased in number of transactions in CIMB Clicks recorded Rp109.3 trillion or increased by 10.26% in 2018.
2016 2017 2018
CIMB Clicks
1.2 13.9
81.1
1.5
99.1
1.7 18.8
Number of transactions (million)
Total users (million)
Transactions Volume (Rp trillion) 15.8
109.3
Exclusive features from CIMB Clicks are provided the ease-access for bill payment, online purchasing as well as online saving account application. Since 2016, CIMB Clicks has implemented a Virtual Card Number (VCN), this new feature provide an easy access for any online transactions in every accepted MasterCard websites thus customers could experience more secure and
practical with their saving account, without credit card needed. VCN is perfect for customers who doesn’t have credit card, however eager to experience online shopping at online merchants that only accept credit card payment.
Go Mobile
Another flagship service feature that CIMB Niaga offered is Go Mobile. During 2018, CIMB Niaga’s service mobile banking has 2.2 million users or increased 23.46% compared to previous year 1.8 million users.
2016 2017 2018
Go Mobile
1.4 9.8
13.2
1.8
13.8
2.2
15.4
Number of transactions (million)
Total Users (million)
Transactions Volume (Rp trillion) 10.6
23.0
Total 15.4 million customer transactions were made through Go Mobile in 2018 or increased by 44.93% compared to previous year. The increase in the number of transactions was in line with the growth in transactions volume of Rp23.0 trillion or significantly increased by 66.76% in 2018.
Rekening Ponsel
Rekening Ponsel had 3.8 million users or increased by 23.43% in 2018 compared to previous year of 3.1 million users.
2016 2017 2018
Rekening Ponsel
2.2 13.8 2.9
3.1
5.9
3.8
35.4
Number of transactions (million)
Total Users (million)
Volume Transaksi (Rp trillion) 28.6
5.6
Furthermore, the Bank’s customers made a total of 35.4 million transactions via Rekening Ponsel in 2018 or increased by 23.66% compared to previous year.
BizChannel@CIMB
2016 2017 2018
BizChannel@CIMB
27.3 32.4
30.2
69.3
33.8
Total Users (thousand)
Number of Transactions (million)
91.2
During 2018, BizChannel@CIMB had a total of 33,765 users or increased by 11.83% compared to position in previous year of 30,194 users.
Financial Performance Review
Total transactions that Bank’s customers made through BizChannel@CIMB reached 91.2 million transactions in 2018 or significantly increased by 31.68% compared to previous year.
2018 STRATEGY
In order to achieve CIMB Niaga mission to provide integrated universal banking services in Indonesia as leading company in ASEAN and other regions, as well as supporting of fasten integration in ASEAN and connecting other regions, CIMB Niaga consistently implementing mid-term strategy of focus on our strength, expanding CASA, cost management discipline, balancing in capital adequacy and risk culture as well as leveraging information technology.
Other than implementation of mid-term strategy, CIMB Niaga also consistently develop the mid-term strategy initiative through development of organic business, as well as synergy and consilidation with afliates and subsidiaries and open to restructuring and alliance with affiliates and subsidiaries or evaluate formation of snew subsidiary if neede in order to support a better service delivery for every customer.
To make sure CIMB Niaga able to achieve a healthy and higher improvement, CIMB Niaga in amid of composing transformation strategy which divided into 3 initiative parts: Funding the Journey, Capabilities Building and Change Management, and Winning in Medium Term.
FINANCIAL POSITION
Financial position (Rp million) 2018 2017 2016 Growth (%)
2018-2017 2017-2016
Cash and Cash Equivalent - Net 27,049,800 32,307,159 22,655,923 (16.27) 42.60
Securities and Government Bond – Net 35,269,590 38,413,540 28,071,315 (8.18) 36.84
Loans – Gross 188,467,537 185,135,413 180,164,039 1.80 2.76
Allowance for Impairment Losses (6,102,278) (7,316,711) (8,128,699) (16.60) (9.99)
Loans - Net 182,365,259 177,818,702 172,035,340 2.56 3.36
Fixed Assets – Net 7,049,560 6,660,173 6,751,644 5.85 (1.35)
Other Assets – Net 15,047,289 11,105,871 12,057,506 35.49 (7.89)
Total Asset 266,781,498 266,305,445 241,571,728 0.18 10.24
Current Account 45,857,151 49,281,023 44,597,980 (6.95) 10.50
Saving Account 54,495,883 50,214,272 47,210,624 8.53 6.36
Time Deposits 90,397,184 89,821,901 88,762,530 0.64 1.19
Total Customer Deposits 190,750,218 189,317,196 180,571,134 0.76 4.84
Deposits from Other Banks 2,928,693 6,884,335 4,557,473 (57.46) 51.06
Marketable Securities and Subordinated Loans 18,953,074 16,379,088 6,386,904 15.72 156.45
Borrowings 2,195,916 5,809,723 5,436,073 (62.20) 6.87
Other Liabilities 12,373,018 10,964,107 10,412,522 12.85 5.30
Total Liabilities 227,200,919 229,354,449 207,364,106 (0.94) 10.60
Total Equity 39,580,579 36,950,996 34,207,622 7.12 8.02
Total Liabilities dan Equity 266,781,498 266,305,445 241,571,728 0.18 10.24
ASSET
CIMB Niaga recorded a total asset of Rp266.8 trillion in 2018 or increased by 0.18% compare to previous year of Rp266.3 trillion. This growth in assets mainly driven of increased in credit distribution from CIMB Niaga by 1.80%
to Rp188.5 trillion in 2018. Other than that, CIMB Niaga recorded an increased in other assets of Rp3.9 trillion in 2018 or Rp11.1 trillion compare to previous year which mainly driven of improvement on collection process of self acceptance process and increased on derivative. Supported by increased of assets in 2018, CIMB Niaga able to maintian Bank’s position as the second larget private owned Bank in Indonesia.
Cash and Cash Equivalent - Net
Cash and Cash Equivalent (Rp million) 2018 2017 2016 Growth (%)
2018-2017 2017-2016
Cash 4,293,370 3,895,997 3,261,730 10.20 19.45
Current Account with Bank Indonesia 10,435,254 11,522,696 13,345,736 (9.44) (13.66) Current Account with other Banks 3,093,901 3,574,267 1,624,152 (13.44) 120.07 Placement with Bank Indonesia 8,777,854 12,490,816 3,645,892 (29.73) 242.60 Placement with other Bank 449,421 823,383 778,413 (45.42) 5.78
Total 27,049,800 32,307,159 22,655,923 (16.27) 42.60
Financial Performance Review
CIMB Niaga’s cash and cash equivalent position declined in 2018 to Rp27.0 trillion. The decreased of 16.27% was mainly driven by placement with Bank Indonesia to Rp8.8 trillion in 2018 compare to Rp12.5 trillion in previous year. Aligned with this account, placement with Bank Indonesia contribution to cash and cash equivalent in 2018 decreased to 32.45%
compared to 38.66% in 2017.
The decreased of placement with Bank Indonesia account driven by the decreased of placement with BI in the form of Bank Indonesia Saving Facility (FASBI).
CIMB Niaga recorded a placement in FASBI in Rupiah of Rp5.4 trillion, decreased 33.31% compared to previous year of Rp8.1 trillion. The decreased also occured on Time Deposits in US Dollar currency in BI from Rp4.4 trillion in 2017 to Rp3.4 trillion in 2018.
Meanwhile, current accounts with Bank Indonesia also decreased by 9.44% to Rp10.4 trillion in 2018 from previous position of Rp11.5 trillion. Bank CIMB Niaga’s GWM has been complied with PBI No. 20/3/PBI/2018
dated 3 April 2018 and Board of Governors Member’s Regulation No. 20/30/PADG/2018 dated 30 November 2018 related amandment of Board of Governors Member’s Regulation No. 20/10/PADG/2018 dated 31 May 2018 related Minimum Statutory Reserves (GWM) in Rupiah and foreign currency for commercial bank, Sharia bank, and Sharia Business Unit which effective 1 December 2018, where GWM in Rupiah and foreign exchange of 6.5% and 8% respectively. Daily GWM in Rupiah of 3.5% and on average of 3%, while daily GWM in foreign currency of 6% and on average of 2%. Macro- Pudential Liquidity Buffer (PLM) and Macro-Prudential Intermediation Ratio (RIM) are also in accordance with Board of Governors Member’s Regulation 20/33/
PADG/2018 dated 17 December 2018 related to second amandment of Board of Governors Member’s Regulation 20/11/PADG/2018 related to PLM and RIM for commercial bank, Sharia bank and Sharia business unit.
2016 2017 2018
Cash and Cash Equivalent - Net
(Rp trillion)
3.60.8 1.6
3.3 13.3
0.8
3.9 11.5 3.6
0.4 8.8
Current accounts with Bank Indonesia Current accounts with other Bank
Placement with Bank Indonesia
Placement with other Banks
Cash 12.5
4.3 10.4 3.1 22.7
32.3
27.0
Securities and Government Bonds - Net Securities and Government Bonds - Net
(Rp million) 2018 2017 2016 Growth (%)
2018-2017 2017-2016
Securities 10,676,225 13,442,054 9,344,227 (20.58) 43.85
Government Bonds 23,999,772 24,971,486 18,184,132 (3.89) 37.33
Securities purchased under resale agreements 593,593 - 542,956 NA NA
Total 35,269,590 38,413,540 28,071,315 (8.18) 36.84
Even though faced a volatility challenges for Rupiah compare to foreign currency as an effect from Global pressure and foreign vapital outflows from financial market in Indonesia, debt market in Indonesia still remained interested as supported of stronger economic fundamental in 2018 such as stronger economy growth and controlled inflation rate. Other than that, international rating agency Moody’s has upgraged Indonesian debt rating to Baa2/stable outlook from Baa3/positive outlook dated 13 April 2018.
Responding this condition, CIMB Niaga actively invest on Government Bonds obligation of Rp24,0 trillion in 2018 compared to last year position of Rp25.0 trillion.
CIMB Niaga recorded and increased of 98.01% to Rp15.1 trillion in 2018 for its Government Bonds which held to maturity compared to previous year position if Rp7.6 trillion. Inline with increased of this account, held to maturity Government Bonds portion increased to 63.01% in 2018 compared to 30.58% contribution in previous year. Other Government Bonds categories
which are available for sale and trading respectively Rp7.2 trillion and Rp1.6 trillion with contribution of 30.18% and 6.81% in 2018.
2016 2017 2018
Government Bonds based on Categories
(Rp trillion)
3.0
8.0
7.3
3.1
7.6
1.6 7.2
Available for Sale Trading Held to Maturity 14.2
15.1 18.2
25.0 24.0
Meanwhile from its maturity periode, Government Bonds portfolio structure that held by CIMB Niaga
has been diversified with a decrease in 1- ≤ 5 year maturity portion to 49.42% in 2018 compare to 55.76% in 2017.
Meanwhile, Government Bonds with tenure > 3-≤ 12 months contribute 24.53% or bigger compare to previous year portion of 14.86%. Meanwhile investment on Government Bonds with tenure more than 5 years reached Rp5.1 trillion in 2018 from Rp4.7 trillion in previous year.
2016 2017 2018
Government Bonds based on Maturity
(Rp trillion)
4.3 6.8 6.1
0.80.2
13.9 4.7
0.81.9
5.1
11.9
> 1 - ≤ 3 months
> 3 - ≤ 12 months
> 1 - ≤ 5 years
> 5 years
≤ 1 month 3.7
1.1 5.9 18.2
25.0 24.0
The average annual interest rate for Rupiah-denominated Government Bonds in 2018 was 6.37% and for foreign currency-denominated bonds was 3.38%. Meanwhile, the corresponding figures were 6.65% for Rupiah- denominated Government Bonds and 4.24% for foreign currencies-denominated bonds.
Securities – Gross (Rp million) 2018 2017 2016 Growth (%)
2018-2017 2017-2016
Held to maturity 3,191,503 1,306,569 962,547 144.27 35.74
Available for sale 7,224,705 11,214,982 7,915,911 (35.58) 41.68
Trading 298,794 959,059 501,682 (68.85) 91.17
Total 10,715,002 13,480,610 9,380,140 (20.52) 43.71
Financial Performance Review
On the other hand, the structure of CIMB Niaga’s held- to-maturity investment in securities has increased by 144.27% from Rp1.3 trillion to Rp3.2 trillion. Contribution from securities increased to 29.79% in 2018. While, available for sale securities and trading decreased 35.58%
and 68.85% respectively to Rp7.2 trillion and Rp0.3 trillion in 2018.
The average annual interest rate for Rupiah- denominated investment in securites was 6.75% and 2.61% for foreign currency-denominated investments in securities in 2018. In the previous year, the
In 2017, investments in securities that fell under the current category reached Rp13.5 trillion with only a small portion of Rp15.0 billion categorized as non- performing. In 2018, the collection of securities was well managed with corresponding figures of Rp10.7 trillion and Rp15.0 billion.
Loans
CIMB Niaga distributed total loans of Rp188.5 trillion in 2018, slightly increased by 1.80% from Rp185.1 trillion in 2017. This improvement in terms of intermediary
function was in line with the slight economic growth of 5.17% in 2018. This also indicates CIMB Niaga’s commitment to increase loan distribution where the strategy is to always place priority on loan quality. CIMB Niaga has also expanded loans by innovating new product that are more competitive, offering loans with more competitive interest rate and implementing a number of other marketing strategies in loan distribution.
Loan Based on Currency
Rupiah-denominated loans made a dominant contribution to CIMB Niaga’s total loan portfolio in 2018. CIMB Niaga’s Rupiah-denominated loans reached Rp163.6 trillion, or accounting for 86.83% of the total loans distributed. Meanwhile, foreign currency-denominated
loans contributed 13.17% of the total loans distributed, reaching Rp24.8 trillion. The corresponding figures in 2017 were 85.57% (Rupiah) and 14.43% (foreign currency).
2016 2017 2018
Loans Composition based on Currency
(%)
13.92
86.08
14.43
85.57
13.17
Foreign Currency Rupiah 86.83
Loan Based on Currency and Interest Rate
(Rp million) 2018 2017 2016
Rupiah 163,645,144 158,429,544 155,091,207
Average interest rate (Rupiah)% 10.25 10.86 11.72
Foreign currency 24,822,393 26,705,869 25,072,832
Average interest rate (Forex)% 4.59 4.43 4.58
Loan Based on Geographic Area
The distribution of CIMB Niaga’s loans based on geographic areas was still dominated by Java Island, which contributed 87.34% to total loans in 2018 compared to 86.37% in the previous year. Of that portion, the Jakarta area showed the largest contribution from total loan distribution with 68.50%. East Java and Sumatra followed with respective contributions of 7.66% and 7.51%.
Loan Based on Geographic Area
(Rp million) 2018 2017 2016 Growth (%)
2018-2017 2017-2016
Jakarta 129,100,095 121,136,145 116,237,834 6.57 4.21
East Java 14,442,628 17,033,434 18,234,362 (15.21) (6.59)
Sumatera 14,149,489 15,534,140 14,535,737 (8.91) 6.87
Central Java 12,787,195 12,802,912 10,479,831 (0.12) 22.17
West Java 8,273,611 8,923,134 8,184,760 (7.28) 9.02
East Indonesia 7,509,613 5,975,957 5,915,167 25.66 1.03
Others 2,204,906 3,729,691 6,576,348 (40.88) (43.29)
Total 188,467,537 185,135,413 180,164,039 1.80 2.76
Loan Composition by Geographic
(%)
68.50 7.66
7.51 6.78
4.393.98 1.17
East Indonesia West Java Central Java Sumatera East Java Jakarta
Others
Loan by Utilization Type
CIMB Niaga was able to well-manage its loan composition with a healthy diversification. The largest contribution came from Working Capital Loan at 52.47% of total Loans. Followed by Consumer Loan (25.22%) and Investment Loan (22.31%) in 2018. In line with the slight increase in the growth rate of the Indonesia’s economy, working capital loan expanded 0.71% to Rp98.9 trillion in 2018.
Loan by utilization type (Rp million) 2018 2017 2016 Growth (%)
2018-2017 2017-2016
Working Capital 98,877,663 98,183,881 85,163,131 0.71 15.29
Investment 42,050,944 41,307,381 48,540,227 1.80 (14.90)
Consumer 47,538,930 45,644,151 46,460,681 4.15 (1.76)
Total 188,467,537 185,135,413 180,164,039 1.80 2.76
Loan by Economic Sector
CIMB Niaga diversifies its loan distribution by sector to avoid the risk of being too concentrated in a specific industry. In 2018 loans were distributed to five largest sectors each contributed more than 10.00% of the total loans distributed consist of industrial; trading, restaurant, hotel & administration; housing; services; and consumption sectors. Combined these sectors contributed 77.88% in 2018 compared to 80.50% in the previous year.
Loan based on economic sector (Rp million) 2018 2017 2016 Growth (%)
2018-2017 2017-2016
Industrial 38,465,326 38,981,482 36,737,599 (1.32) 6.11
Trading, restaurants, hotels and administration 38,274,705 38,824,630 36,404,737 (1.42) 6.65
Housing 28,213,382 25,428,713 23,349,265 10.95 8.91
Business services 22,721,851 26,475,802 29,118,292 (14.18) (9.08)
Consumption 19,103,208 19,332,159 21,915,299 (1.18) (11.79)
Agriculture 16,551,605 15,863,929 13,330,488 4.33 19.00
Financial Performance Review
Loan Composition by Economic Sectors
(%)
20.40
10.14 8.78
13.34
12.06
14.97
20.31
Agriculture Consumption Services Housing Trading, Restaurant, Hotel and Administration Industrial
Other Sectors
Loans by Segment
In 2018, Corporate banking represented 37.15% of CIMB Niaga’s loans, growing by 0.60% to Rp70.0 trillion, compared to Rp69.6 trillion in 2017. This is followed by Consumer Banking which contributed 26.05% to CIMB Niaga’s loans, or increasing by 0.92% to Rp49.1 trillion. Commercial and MSME Banking which compared to 2017 increased by 6.51% and 0.57%, to Rp37.3 trillion and Rp32.1 trillion, respectively.
Loan Composition by Segment
(%)
Consumer Banking MSME Banking Corporate Banking Commercial Banking 35.87
28.93
18.63
16.57
37.59 26.27
18.90
17.24
2017
37.15 26.05
19.77
17.03
2018 2016
Non-Performing Loans
Improvements in the management of CIMB Niaga’s credit quality can be observed from the decrease in the gross Non Performing Loan (NPL) ratio to 3.11% from 3.75% in 2017. This ratio improvement is in line with the decrease in CIMB Niaga’s non-performing loans to Rp5.8 trillion in 2018 from Rp6.8 trillion in the previous year.
Loan Collectibility
(Rp million) 2018 2017 2016 Growth (%)
2018-2017 2017-2016
Pass 175,425,428 169,692,700 161,503,059 3.38 5.07
Special Mention 7,277,684 8,610,719 11,744,987 (15.48) (26.69)
Sub-standard 813,957 1,374,593 1,022,001 (40.79) 34.50