CIMB Niaga, BCA earnings boosted by surge in loans, fee revenue

Bank Central Asia and Bank CIMB Niaga, posted strong earnings in the first nine months of the year due to strong loan growth, according to a Jakarta Globe report.

BCA posted Rp 7.7 trillion or $870 million in net profit in January through September, up 25 percent year-on-year from Rp 6.1 trillion in the same period a year ago.

Strong growth in net interest income, or income from loan interest, outweighed the fall in non-interest income, which includes its treasury, investment banking business and fee income from transactions.

“Our loans portfolio increased, supported by a conducive business climate. Demand from clients [for loans] was strong due to relatively low interest rates,” president director of BCA, Jahja Setiaatmadja, said on Monday.

Total outstanding loans as of September rose to Rp 176 trillion, representing a 27 percent increase from a year earlier.

Jahja said demand was driven by the commercial sector and consumers, which were supported by a favorable economy, strong consumer demand, and relatively low interest rates.

Strong loan growth boosted BCA’s net interest income in the first nine months of the year by 36 percent from the same period a year ago. Revenue from loan interest rose to Rp 12.4 trillion in January-September 2011 from Rp 9.1 trillion in the same period a year ago.

The bank also experienced a 15 percent jump in fee based income, to Rp 3.35 trillion.

However, non-interest income fell 10 percent to Rp 5.1 trillion in the first nine months of 2011 from 5.7 trillion in the same period a year ago.

On the other hand, net profit at CIMB Niaga rose 35 percent to Rp 2.3 trillion in the first nine months of the year. It also cited strong loan growth as a key factor for strong profit growth.

The bank had Rp 117 trillion in outstanding loans as of September, up 25 percent from the same period a year ago.

“We are encouraged by the positive performance of the bank despite the challenging business environment,” said CIMB Niaga president director Arwin Rasyid.

“We will continue to invest in our infrastructure, so that we will bring on quality banking solutions to all our customers and stakeholders across Indonesia.”