BANKING - CIMB Niaga can become larger than Mandiri by 2016 - BRI might surpass Mandiri this year

JAKARTA (IFT) - According to the IFT Research Department, in the next five years, state-owned banks may face tough competition from private banks, whose majority stakes are controlled by foreign investors.

Assets growth in PT Bank CIMB Niaga Tbk (BNGA) and PT Bank Pan Indonesia Tbk (PNBN) in 2016 will surpass PT Bank Mandiri Tbk (BMRI) and PT Bank Central Asia Tbk (BBCA). This is reasonable as CIMB Niaga and Panin Bank recorded the highest average annual asset growth among ten largest banks in Indonesia. (full story - indonesia finance today)

The IFT Research Department assessment showed that the average annual growth of Bank CIMB Niaga assets has reached 33.09 percent, while Panin Bank's was 28.58 percent. The growth even exceeded the annual growth of the five largest banks by assets, including PT Bank Rakyat Indonesia Tbk (BBRI) at 26.43 percent, PT Bank Central Asia Tbk (BBCA) at 16.23 percent, PT Bank Mandiri Tbk (BMRI) at 12.61 percent and PT BNI Tbk (BBNI) at 9.34 percent.

Historically, Bank CIMB Niaga has recorded the highest growth in assets in the 2008 to 2009 period at 54.23 percent. Subsequent growth was more moderate, although still above 30 percent. More fluctuations were recorded for Panin Bank, as in the first quarter of 2011 which only stood at slightly above ten percent.

The CIMB Group from Malaysia currently controls 97.93 percent stake in CIMB Niaga, and ANZ Banking Group of Australia currently controls 39 percent stake in Panin Bank.

CIMB Niaga and Panin assets growth is estimated to surpass BNI in 2013 and Mandiri and BCA assets will be surpassed in 2016. BCA has a growth pattern like Mandiri in the 2006 to 2007 period.

Steady BRI

The IFT Research Department is also in the opinion that BRI may become the largest bank by assets in Indonesia by this year, if the bank can maintain its average annual assets growth at 24.16 percent, as recorded in the 2009 to 2010 period. BRI's strongest growth potential is from its micro credit segment.

In the first quarter of 2011, micro credit contributed the largest growth to BRI at 5.7 percent, compared to the last quarter of 2010. Ahmad Baiquni, the BRI Finance Director, said that the bank will increase credit distribution by opening new branch offices and maintaining micro credit.

At the end of 2010, BRI credit distribution already reached Rp 241 trillion, higher than Mandiri at Rp 219 trillion. Average loan to deposit ratio for five years was 76 percent, higher than 58 percent for Mandiri. This showed that BRI is more aggressive in distributing credit. BRI compound annual growth rate for the 2005 to 2010 period has reached 28 percent, higher than 18 percent for Mandiri. Third party fund in 2010 grew by 28 percent to Rp 329 trillion compared to 2009, slightly lower than Rp 333 trillion for Mandiri.

The IFT Research Department previously estimated that the average annual growth in BRI third party fund for the 2005 to 2010 period will reach 28 percent, much higher than the ten percent for Mandiri. (*)

Source : http://en.indonesiafinancetoday.com/read/5730/CIMB-Niaga-Can-Become-Larger-Than-Mandiri-by-2016 - May 24, 2011