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CIMB’s Indonesia unit to make more earning than Malaysian unit
PT Bank CIMB Niaga Tbk, the Indonesian unit of CIMB Group Holdings Bhd is set to overtake its Malaysian counterpart in earning contribution to the group by doubling it to 40 percent by 2015 from 20 percent currently, the Antara news agency reported.
Its Group Chief Executive Officer, Nazir Razak said there is huge potential in micro-lending, investment banking, rupiah based bond issuance, hire purchase, credit card and Islamic finance.
"We are strong in domestic currency bonds," he said after the company’s Annual General Meeting (AGM) Friday.
Currently, the Malaysian operation contributes about 74 percent of the group’s earnings. This, however, is expected to go down below 40 percent amid the potential growth in Indonesia.
Nazir said CIMB Thai’s contribution was expected to rise to 10 percent by 2015 from one percent now. Another 10 percent will come from other regional operations, including Singapore, he said.
Elaborating on its potential in Indonesia, CIMB Niaga’s chief executive officer, Arwin Rasyid said the growth of bank loans in Indonesia would be in line with the industry`s target of 20 percent.
The Indonesian unit is also looking at increasing its branch numbers to 700 from 650 now. It also plans to increase its pawn business to 60 branches by year-end.
Nazir also said that the group might have more credit card holders in Indonesia as compared to Malaysia.
"Potentially by end of this year, we may have more credit card holders in Indonesia than in Malaysia. The Malaysian market is shrinking as the government has introduced service tax. Whereas in Indonesia we are new and growing fast," he said.
He said there were about 700,000 CIMB credit card holders in Indonesia, while in Malaysia it is one million, down from 1.2 million previously.