A nice surprise: CIMB Niaga's NIM expanded to 5.4% in 3Q15

CASA also increased at a robust rate of 15.7%.

Against management’s guidance for an ongoing contraction in NIM to below 5%, Niaga’s 3Q15 NIM unexpectedly expanded to 5.40% in 3Q15 from 5.04% in 2Q15, according to Maybank Kim Eng. What surprised management was the build-up in CASA momentum, as CASA expanded at a robust rate of 15.7% YoY to 47.7% of total deposits from 45.8% end-Sep 2014.

The other contributory reason to the improvement in NIM was the bank’s ability to price USD deposits at a lower rate of about 1% versus 3% previously, due to reduced demand for USD loans and thus USD deposits.

"Management nevertheless continues to guide for NIM to maintain a downtrend as the bank focuses on high credit quality customers and shifts towards providing more working capital lines to corporates rather than investment-related lines. Moreover, the bank will be pulling back on lending to the higher yielding SME segment."