Citi Indonesia Posted Rp869 Billion in Net Income during Third Quarter of 2021
By : Nata Kesuma | Friday, November 26 2021 - 13:25 IWST
Citi Indonesia CEO, Batara Sianturi
INDUSTRY.co.id - Jakarta, November 25, 2021 – Citibank N.A., Indonesia (Citi Indonesia) posted a Net Income of Rp869 billion during the third quarter of 2021. The earning is lower than the same period last year, driven by lower trading income and Net Interest Income.
Nevertheless, Citi Indonesia managed to bounce back from its business performance during the previous quarter, as its standalone Net Income during Q3 2021 reached Rp 408 billion, or higher by Rp 543 billion compared to the 2nd Quarter standalone mark, as driven from lower credit provisioning.
The net income was supported by Citi Indonesia’s credit impairment charge which remained relatively stable compared to last year. This was due to an increase in credit impairment in the Institutional Banking line, originating from a corporate client and was successfully offset by a decrease in credit impairment in the Consumer Banking.
Citi Indonesia recorded a gross NPL of 3.3%, an increase from 2.8% from last year, due to the credit quality of one corporate client. Citi Indonesia remains comfortable with the quality of the existing loan portfolio as it consistently maintains a prudent risk management approach in managing the impact of the pandemic. In addition, the company also continues to ensure adequacy of provisions where it maintains low Net NPL, which is at 0.9%.
Citi Indonesia continues to be highly liquid with Lending to Deposit Ratio (LDR) at 62.5% and well-capitalized with Capital Adequacy Ratio (CAR) at 26.7%, an increase from 26.5% in the same period last year.
Citi Indonesia CEO Batara Sianturi stated, "We are committed and optimistic to continue improving our business performance, this is evident through the various strides we have made in the midst of the COVID-19 pandemic. There are significant progress and innovations, both at institutional and consumer banking. Going forward, we will also continue to transform digitally and enhance our digital banking services.”
The Banking, Capital Markets and Advisory (BCMA) of Citi Indonesia recorded an earning growth of 14% during the year-to-Q3 period, when compared to the same period last year. The Top Tier Local Corporates and Public sector Group continued to support major deals and transactions, including corporate actions, syndicated loans and the capital market. Meanwhile, the Financial Institutions Group, that list financial institutions as clients, also provided positive contribution, particularly from the cash management, trade financing/services, foreign exchange, interest rates and custodian businesses.
The Global Subsidiaries Group saw an increase in both earnings and market share in the multinational corporations (MNC) segment amid the challenging market climate. This was achieved through several initiatives, including the Asia-to-Asia initiative that grew by 17% during the year-to-Q3 period, when compared to the year-ago figure. GSG also recorded a 21% credit disbursement growth when compared to the end of 2020.
Citi Indonesia’s Commercial Bank unit saw a growth in earning of 24% during the third quarter of 2021, along with credit growth of 14%. Taking into account that upward trend in customer activities and behaviors, Commercial Bank will continue to focus on providing digital banking services, as well as effective and efficient cash management products and solutions.
Furthermore, in Retail Banking, Citi Indonesia proudly served as the distribution partner of retail sukuk SR014 and SR015 that are being offered online. The bank also participated in the launch of the benchmark series of Indonesian Government Bonds, namely FR090, FR091 and FR092 in July 2021 to further complement the range of its product offerings. With the current downward trend of interest rates, Citi Indonesia is recommending its customers to diversify their assets, among others on products that can provide higher yield potential.
As of September 2021, Citi Indonesia has also raised its digital investment transactions to 59%, growing by 70% compared to the same period last year. Digital investment transactions played an important role in supporting the growth of the wealth management business during the COVID-19 pandemic.
In addition, in the midst of continuing uncertainty, Citi Indonesia and AIA Group Limited (AIA) have collaborated to launch a health protection products provides strong coverage for customers until the age of 99 years. Citi Indonesia’s wide range of bancassurance offerings also includes products that provide life and long-term financial protection, in particular for retirement and children's education.
In regards to the progress of Citi Indonesia’s consumer banking sale, Batara emphasized “Across our remaining strategy refresh markets, we are pursuing consumer franchise sales with a focus on optimal results for our people, our clients and our shareholders. Conversations with potential buyers continue in these markets including in Indonesia, with strong interest from a broad range of bidders. As we proceed with the consumer divestiture process, we remain committed to growing our institutional business in Indonesia which represents an essential part of our global network.” In regards to the operations of consumer banking, Batara further noted “This sale process will not affect our ongoing commitment to our customers and the products and services that we offer. Our Consumer operations, including branches, call centers and officers, continue to operate normally.”