Bank CIMB Niaga, the country’s fifth-largest bank by assets, posted an almost 30 percent jump in net income in the first quarter amid a major rise in the gap between earnings from borrowers and interest paid to depositors.
Jakarta-based CIMB Niaga, controlled by the second-biggest financial institution in Malaysia, CIMB Group, said that net income rose 29 percent to Rp 938.2 billion ($102 million) in the January to March period this year.
Net interest income — earnings from borrowers after interest is paid to depositors — rose 8 percent to Rp 2.2 trillion in the period, the company said in a brief prospectus published in Investor Daily on Thursday.
Many Indonesian banks, including Bank CIMB Niaga and Bank Central Asia, have benefited from strong loan demand and low borrowing costs in the country’s growing economy. Loans for consumers seeking to buy cars and houses are a major part of the banks’ lending portfolios.
Car sales, considered an indicator of overall economic performance, rose to 250,533 units in the first quarter this year, up 11 percent from a year earlier, according to the Association of Indonesia Automotive Manufacturers (Gaikindo).
Total outstanding loans at CIMB Niaga rose to Rp 122.6 trillion at the end of March from Rp 109.7 trillion a year earlier.
CIMB Niaga is known as a major home mortgage lender, competing against state lender Bank Tabungan Negara, which also specializes in mortgages.
CIMB Niaga also lends to small and medium enterprises, and offers micro-finance and corporate loans as well.
The bank last week announced it had reached a deal with AON for the insurer to assist clients borrowing for ship purchases.
Shares in Bank CIMB Niaga rose 7 percent to Rp 1,290 on the Indonesia Stock Exchange on Thursday, leaving the shares up 6 percent so far this year.