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Tag: Finance

  • Blockchain comes to Myanmar microfinance

    Blockchain comes to Myanmar microfinance

    Infoteria Corporation and Tech Bureau Corporation (hereinafter “Tech Bureau”) have successfully transferred loan and deposit account data in the main system of BC Finance, one of the largest microfinance institutions in Myanmar, to mijin, the private blockchain placed on Microsoft Azure using ASTERIA WARP and mijin adapters.

    We hereby announce that this verifies that ASTERIA WARP and the private blockchain mijin are applicable in the operational process of microfinance and the private blockchain technology is applicable to account data recording. This is the world’s first demonstration experiment that used a private blockchain in microfinance.

    Process overview

    We recorded all transaction history (account data) of active accounts at a branch of BC Finance (which operates a total of 19 branches in eight states) in the private blockchain mijin using ASTERIA WARP and mijin adapter. BC Finance assigned a total of three accounts, including one loan account and two savings accounts, to one customer.

    Future plan

    (1) Plan to carry out an experiment for concurrent and consecutive operations over a certain period of time. This is scheduled to begin in the first half of July and continue for approximately six weeks.

    (2) Will consider developing an application that enables data writing and viewing from clients (terminals at each branch) to mijin.

    Upcoming developments

    The number of bank accounts in Myanmar is still limited to approximately two million for a population of more than 50 million, and bank services are available only to the affluent, who represent only a small portion of the population. Microfinance provides financial services such as loans and deposits to a broader segment of the population, and as such plays an important role in supporting Myanmar’s economic growth. Myanmar has achieved 7-8 percent economic growth since its democratization in the spring of 2011, and in the spring of 2016, the military government came to an end, encouraging the lifting of economic sanctions imposed by the U.S. Such factors are expected to facilitate further growth, and a significant increase in the number of BC Finance customers is expected.

    While the current system means rising costs of data management as the number of users grows, the introduction of the blockchain technology enables the safe and low-cost operation of account data. We expect that this will facilitate the growth of the microfinance business.

    Infoteria and Tech Bureau are focusing on the promotion and penetration of blockchain technology not only in Japan, but also overseas. The two companies plan to develop this alliance on a global scale by applying the results of this experiment to other countries.

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  • Standard Chartered Bank Indonesia appoints new CEO

    Standard Chartered Bank Indonesia appoints new CEO

    UK-based financial giant Standard Chartered has appointed Rino “Donny” Donosepoetro as the new CEO of its Indonesian branch, replacing Shee Tse Koon, who is leaving to pursue another career.

    Donny’s new appointment will be effective as of Sept. 1 as it is subject to regulatory approval. He will report to Ajay Kanwal, Standard Chartered’s regional CEO for ASEAN and South Asia.

    Lea Kusumawijaya, chief financial officer at Standard Chartered Bank Indonesia, has been appointed as acting CEO with immediate effect.

    “Donny brings with him an extensive and diverse international experience in the operations of the bank’s different business sectors,” Kanwal said in a statement on Tuesday afternoon.

    He said Donny, who has a degree in international relations, had knowledge in the areas of audit and governance that would further strengthen the group’s businesses and franchises in Indonesia.

    In his 20-year career in the group, Donny has held a number of diverse roles across businesses in several markets including the United Arab Emirates, Indonesia, UK, Singapore and the Falkland Islands.

    As a CEO of Standard Chartered’s Indonesian branch, Donny will be responsible for developing and executing the company’s business strategy. He is also expected to build relationships with local clients as well as regulators and stakeholders, as well as improving bottom-line profitability and capital.

    Kanwal said the bank was fully committed to investing in Indonesia, with a focus on corporate and retail banking, which is “strategically important as it has been in the country for over 150 years.” The bank is also sharpening its focus on enhancing wealth management platforms and investing in commercial banking to cater the growing local medium businesses.

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  • Bioalpha banks on Indonesian,Chinese markets to boost growth

    Bioalpha banks on Indonesian,Chinese markets to boost growth

    Bioalpha Holdings Bhd is banking on its export markets in Indonesia and China to boost the group’s top line growth in the next two years.

    The firm, which produces halal-certified herbal and non-herbal based health supplement products, said that to date, Indonesia was its core market and expected sales from the region to grow by 50% in the next two years.

    At present, Indonesia sales made up more than 48%, or RM14mil, to the group’s turnover in financial year 2015 (FY15).

    “Indonesia’s market is still growing and in the last five years it has a compounded annual growth rate of about 37%,” managing director William Hon Tian Kok told recently.

    Hon said Bioalpha had gone into Indonesia after it recognised the huge potential in the market to offer its halal-certified products.

    “The risk in Indonesia is also lower because we have existed in the market since 2007 via our first sales office there,” noted Hon.

    But Hon has bigger plans for Indonesia, saying that the company aimed to turn its repackaging facility in the Riau province to a fully-fledged manufacturing plant in the long term.

    In May, Bioalpha’s unit Bioalpha International Sdn Bhd had entered into 60:40 joint venture with Mutia Restiana, a well-connected Indonesian to set up PT Herbal Malindo Makmur, for US$250,000.

    This was funded via internally generated funds.

    Hon said the PT Herbal’s acquisition not only solved product registration issues in Indonesia, but also enabled the group to repackage their semi-finished products in a 4,000 sq ft repackaging facility in Indonesia to be ready this August.

    Inevitably, the acquisition will also widen Bioalpa’s market share via small and medium enterprises and multinational corporations in Indonesia, and enable its existing clients in Malaysia to offer their products there, according to Hon.

    The group intends to double the number of product launches to 20 products in Indonesia by the end of 2017.

    Bioalpha’s second largest export market is China and it made up about 28% of the group’s revenue or RM8.3mil in FY15.

    While Bioalpha was backed by its strong research and development centre, Hon said the demand from China was a result of aggressive advertising and promotional activities that started in 2014.

    “We have about five original design manufacturers in Beijing.

    “And our focus will be the Muslim populated areas like Lanzhou, Xi’an, Xinjiang and Qinghai and we have identified four distributors in these provinces,” he said, adding that Bioalpla already has presence in the southern and central part of China.

    On the local front, Hon revealed that it was on the lookout to expand its retail chain of pharmacies via merger and acquisitions, with the idea of franchising them in the near term.

    Bioalpha now owns 13 retail pharmacies under the brandname Constant, mainly in the Klang Valley.

    Hon said Bioalpha bought Mediconstant Holding Sdn Bhd for RM5mil last year from Ng See Hein and Loh Peng Yeow in December last year with the aim to expand its housebrand supplements.

    “This not only reduce marketing costs but enable us to reach out to customers via new formulations,” he said. adding that domestic sales is expected to grow by 40% in the next two years.

    The company also has a 70:30 joint venture with MyAngkasa Holdings Sdn Bhd, the country’s largest cooperative organisation.

    MyAngkasa is a subsidiary of Angkatan Koperasi Kebanngsaan Malaysia Bhd that has 10,000 cooperatives under its umbrella and eight million members.

    “The earnings potential from this JV is also huge considering that the members can purchase our products on a special discount from our retail pharmacies,” he added.

    Bioalpha has its own organic herbal farms in Desaru in Johor and Pasir Raja in Trengganu.

    More than 20 types of herbs are being harvested at its 300-acre land in Desaru, Kota Tinggi.

    The other is a 1,000-acre farm in Pasir Raja, of which 123 acres are harvested, while the remaining 877 acres are currently being cleared.

    Hon said the company expected to produce about 400 metric tonnes of herbal medicines by 2020.

    The group is also known for its inhouse liquid fermentation process that is able to produce medicinal mushrooms strains.

    One of its bestsellers include tiger milk mushrooms, traditionally used to cure respiratory problems.

    Noteworthy is Bioalpha’s market capitalisation, which has more than doubled to about RM200mil now, compared to when it was first listed in the Ace Market in April, last year.

    The company has dividend policy of 30% of profit after tax and has recently proposed for a bonus issue of 166,666,666 new ordinary shares of RM0.05 each in the company on the basis of one bonus share for every three existing Bioalpha shares held at an entitlement date to be determined later.

    Hon is currently the major shareholder with a 17% stake, followed by Malaysian Technology Development Corp 16.1% interest and Perbadanan Nasional Bhd 10.3%.

    Shares of Bioalpha closed unchanged at 38 sen on Friday, arriving at a market capitalisation of RM190mil.

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  • Foreign direct investments rise to RM12.8b in first quarter

    Foreign direct investments rise to RM12.8b in first quarter

    Despite a weaker global environment, Malaysia remains a competitive investment location for foreign investors, with an increase of 28% in this quarter, says minister Mustapa Mohamed.

    In the first quarter (Q1) of 2016, Malaysia recorded RM37.3 billion of approved investments in the services, manufacturing and primary sectors.

    These investments involved 1,271 projects and will create 39,990 employment opportunities.

    “Despite a weaker global environment, Malaysia remains a competitive investment location for foreign investors, with an increase of 28% in this quarter.

    “Year-on-year, FDI (foreign direct investments) increased to RM12.8 billion in Q1 2016 from RM10.0 billion in the corresponding period of 2015.

    “Domestic investments led with RM24.5 billion or 65.7% of total approved investments in Q1 2016,” said International Trade and Industry Minister Mustapa Mohamed today.

    “Taking into account the two lumpy projects approved in last year’s Q1 i.e. PRPC’s project in Johor and LNG9’s project in Sarawak, Q1 2016 showed a decrease from RM69.8 billion in comparison as these two projects alone amounted to RM35.3 billion.

    “ I would like to highlight that without the two big projects, Q1 2016 actually shows an overall increase of 8.1% from RM34.5 billion last year,” the minister added.

    Services sector

    The services sector attracted the largest portion of approved investments in the first three months of 2016, amounting to RM27.6 billion. A total of 1,088 services projects were approved, creating 20,200 employment opportunities, the largest potential employer in the economy.

    “Foreign investment in the services sector surged by 112.1% from RM3.3 billion in Q1 2015 to RM7.0 billion in the same period this year.

    “We are seeing more foreign participation in distributive trade, education services, global establishments, financial services and real estate sub-sectors,” explained Mustapa.

    Distributive trade saw an increase of 992% of foreign participation from RM101.5 million in Q1 last year to RM1,108.7 million in Q1 2016.

    The increased investments from regional and international retailers have boosted Malaysia’s ranking to third position in the 2016 Global Retail Development Index (GRDI) by A T Kearney.

    For the education sub-sector, the increase of 672.7% of foreign investments from RM19.3 million in Q1 2015 to RM149.2 million in Q1 2016 reflects Malaysia’s success in accelerating the process in making the country a regional education hub of excellence.

    The private education sector will complement the government’s efforts in providing access to quality education to the people.

    As to date, there are 501 private higher institutions that offer a wide range of disciplines at every level of education, including short-term and professional courses certificate, diploma, degree and post-graduate degree qualifications.

    Global establishments and end-to-end global supply chain management services are fast becoming important components in the Malaysian economic backbone.

    In Q1 2016, the Malaysian Investment Development Authority (Mida) approved a total of 60 global establishments with investments of RM5.6 billion.

    The lion share of these was from six principal hub projects with total investments worth RM5.5 billion. These investments were in the industries of aerospace, electronic & electrical (E&E), food & beverage as well as resource-based industries.

    The principal hub initiative is among the high value-added services that are currently promoted by Malaysia.

    Manufacturing sector

    Investments in the manufacturing sector for January-March 2016 totalled RM8.9 billion from 170 projects. The approved manufacturing projects are expected to generate about 19,650 employment opportunities.

    “Despite the decrease in investments in this sector for the first quarter of this year, it is noteworthy that Malaysia has attracted significant investments in the transport equipment industry, with a spike of 1,584% from RM40.1 billion in Q1 2015 to RM675.7 billion in Q1 2016.

    Other industries which recorded high growth rates were paper, printing & publishing (944.0%), food (550.0%), leather & leather products (162.3%), chemical & chemical products (159.1%), scientific & measuring equipment (78.8%), and rubber products (57.1%).

    Regardless of a lower investment value in Q1 2016, the E&E industry emerged as the main contributor to the total approved investments in the manufacturing sector compared to the corresponding period last year.
    Most of the high quality projects in E&E are concentrated in solar, fabricated wafers and semiconductor devices.

    Primary sector

    Malaysia continued to register a lower investment in the primary sector due to the challenges in global crude oil prices. Investments in this sector recorded a total of RM874.9 million in Q1 2016.

    The mining subsector led with approved investments of RM692.2 million, mainly from oil and gas exploration activities.

    Approved investments in the plantation and commodities subsector totaled RM129.0 million. In Q1 2016, a total of RM53.7 million investment was approved in the agriculture subsector.

     

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  • BRI Goes Digital for Cashless Society Program

    BRI Goes Digital for Cashless Society Program

    Bank Rakyat Indonesia (BRI) has been revamping its digital banking services as part of its “cashless society” program and in support of the central bank’s Non-Cash Payment Movement (GNNT), a senior BRI official said last week.

    BRI Consumer Director Sis Apik Wijayanto said the top small-business lender intends to reduce cash to a minimum for every transaction.

    “This is the digital era, tech support is crucial. The goal is to improve payment efficiency and offer customers  the utmost convenience,” Sis said.

  • Mary Buffett Launches Jitta.com for Bangkok Investors

    Mary Buffett Launches Jitta.com for Bangkok Investors

    Mary Buffett, the former daughter-in-law of famed investor Warren Buffett, helped launch Jitta.com last week, a platform aimed at retail stock investors in Thailand’s capital. Ms. Buffett brings the Buffett know-how to Bangkok to appeal to investors hoping to become as good as the famous stock picker.

    Co-author of the best-selling book “Buffetology,” Mary is putting her name behind the Jitta startup. After testing the platform for herself, Ms. Buffett found it to be an impressive tool for investors.

    Mary’s endorsement of Jitta.com is an obvious boost for the Thai-based startup, which is looking to make it big on the international retail investment scene.

    Ms. Buffett met with Jitta.com founder Trawut Luangsomboon three years ago, and was one of the initial investors in the project. The start-up launched in the U.S. in 2014.

    Jitta uses Warren Buffett’s investment style to simplify retail investment and make it easy for most individuals to get started. Buffett’s style is primarily focused on buying great stocks when they’re undervalued.

    When shares drop below Jitta’s “fair price,” investors are encouraged the buy the stock – just as Warren Buffet would do.

    Through the adoption of Buffetology’s key elements, this platform helps investors minimize risk while doing their due diligence.

    Jitta covers stocks in Singapore, U.S., Thailand, Vietnam and Hong Kong.

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  • CIMB’s Corporate Card Solutions to see big growth

    CIMB’s Corporate Card Solutions to see big growth

    CIMB Bank Bhd’s newly-launched Corporate Card Solutions is expected to gain significant growth momentum, given that it is a gamechanger in the market.

    In collaboration with MasterCard, the CIMB Corporate Card Solutions offers convenience, control and transparency for business operational expenditure, through its corporate card, purchasing card and virtual card solutions.

    “We are very excited about this launch because the corporate segment has been a domain of the consumer segment in the past.

    “This is a very new solution, for us and in the market as well.

    “A lot of banks now do not do this business,” said CIMB Group transaction banking head Thomas Tan after the launch ceremony yesterday.

    New cards: (from left) MasterCard South-East Asia Indonesia, Malaysia and Brunei group country manager and Islamic payments group head Safdar Khan, Zafrul, MasterCard Asia/Pacific co-president Ari Sarker, and Tan having a closer look at the mock credit cards at the launch of CIMB’s Corporate Card Solutions.

    The Corporate Card Solutions offers unique, customised solutions for companies, such as setting spending limits and customising merchant categories by each individual card holder, with real-time overview of employees’ travel and entertainment expenditure.

    Meanwhile, the purchasing card automates the company’s procurement process by capturing card transactions in real time, which facilitates account reconciliation.

    Companies also have the option to decide on the billing cycles, like a 45-day or 60-day credit interest-free period, unlike consumer credit cards which have one determined billing cycle.

    As for the virtual card solution, businesses can randomly generate a 16-digit virtual card number that is associated with a specific payment, which is then securely transmitted to a specific supplier when payment is due.

    Data is captured real time and matching a unique virtual card number to a specific payment improves reconciliation and aids data analysis.

    These solutions help optimise cash flow, enabling businesses to operate more efficiently through the entire value chain.

    “In today’s business environment where cost management is a high priority, it is our aspiration to help organisations to significantly improve their operational and cost efficiency by automating their transactional flows.

    “These solutions offer unique savings features by optimising cashflows and working capital.

    “Our digital banking solutions such as these are also a response to Bank Negara Malaysia’s call for a reduction in the usage of cheques from 207 million in 2011 to 100 million by 2020,” said CIMB Group chief executive Tengku Datuk Sri Zafrul Aziz.

    The CIMB Corporate Card Solutions is targeted towards government and state agencies, small and medium enterprises (SME) as well as corporate sectors.

    Prior to yesterday’s official launch, CIMB had converted five corporate clients to its Corporate Card Solutions during the soft launch.

  • Woori Bank to offer insurance products in Indonesia, Vietnam

    Woori Bank to offer insurance products in Indonesia, Vietnam

    South Korea’s commercial bank Woori Bank will join hands with local insurance companies to provide insurance service and products from its global outlets starting with its local unit in Indonesia.

    According to bank sources, the bank will be able to sell insurance products of Hanwha Life Insurance Co. through its Indonesian unit Bank Woori Saudara in the second half of this year. The bank wants to establish up to 300 outlets across the globe and decided to add insurance service, a bank official said.

    Hanwha Life Insurance’s Indonesian operation was established in October 2013 and currently has eight branches and 1,200 insurance planners. It will sell savings insurance products like variable annuity through 131 Bank Woori Saudara outlets. The partnership will be a win-win arrangement for the two since they can save costs by mixing business and sharing business.

    Depending on demand, Woori Bank will also sell non-life insurance products of Samsung Fire & Marine Insurance Co. and KB Insurance Co. via its Indonesian operation.

    Woori Bank will also target Vietnamese bancassurance market in partnership with Hanwha Life Insurance. The bank has two branches in Ho Chi Minh and Hanoi in Vietnam. Since the branches have the license to sell bancassurance products, it plans to sell saving insurance products of Hanwha Life Insurance and later products of Samsung Fire & Marine.

    Hanwha Life ranked eighth in terms of new insurance contracts in Vietnam last year. The insurer has 12,500 insurance planners in 54 branches.

    According to Woori Bank, the Indonesian life insurance market has almost doubled from $5.3 billion in 2010 to $9.8 billion in 2014. Vietnam showed similar growth.

  • Shinhan Bank officially launches its Indonesian operations

    Shinhan Bank officially launches its Indonesian operations

    South Korea’s Shinhan Bank has embarked on operations in Indonesia via Shinhan Bank Indonesia, a move that is expected to help the Korean bank expand its presence not only in the Southeast Asian country but also across Asia.

    Shinhan Bank said on Tuesday it officially launched Shinhan Bank Indonesia, which was renamed from Bank Metro Express (BME), a Jakarta-based bank with 19 branches that was acquired by the Korean bank last year. Shinhan Bank Indonesia is newly headquartered in the International Financial Center Tower 2 in Jakarta, the capital city of Indonesia.

    The kickoff of Shinhan Bank Indonesia’s operations follows a series of launches of the Korean bank’s overseas operations in other Asian countries such as Japan, China and Vietnam in recent years. The latest overseas operation is expected to help Shinhan Bank achieve its ambitious goal to build an extensive financial network across Asia.

    The Korean bank also aims to merge Shinhan Bank Indonesia with Centratama Nasional Bank (CNB), another Indonesian bank that it took over last December, later this year. The Indonesian bank has 41 branches across Surabaya, the second biggest city in Indonesia, and other cities in Java Island.

    Once the merger is complete, the Korean bank would have 60 networks across Indonesia, the world’s fourth most populous country. It currently has 141 overseas networks across 19 countries. It would also be the first in the Korean banking industry to purchase two offshore banks and merge them.

    Cho Yong-byung, the president of Shinhan Bank said at the launching ceremony on Tuesday that he expects the merger of the two Indonesian banks would set a new milestone in Indonesia.

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  • Bank Mandiri chalks up Rp3.8 trillion in Q1 net profit

    Bank Mandiri chalks up Rp3.8 trillion in Q1 net profit

    The state-owned lender Bank Mandiri reported Rp3.8 trillion in net profit in the first quarter of 2016 thanks to increases in net interest income and fee-based income.

    The countrys largest bank in asset recorded a 19.1 percent in increase in net premium and net interest income to Rp13. trillion and 8 percent rise in fee-based income to Rp4.2 trillion.

    President Director of the bank Kartika Wirjoatmodjo said the increase in net interest income and fee-based jacked up operating income that surged 16.3 percent on-year to Rp17.2 trillion.

    The increase in income contributed to 15.9 percent growth in operating profit to Rp9.3 trillion, Kartika said here on Sunday.

    “Productivity of assets, liability and transaction business have been well managed amid the domestic and global economic slowdown,” he said.

    The liquidity of the bank was marked with the increase in third party funds held by the bank to Rp655.1 trillion in the first three mo9nths of the year, he said.

    Around 62 percent or Rp406.5 trillion of the third party funds were in giro and savings . Savings dominated the cheap fund growing Rp18.2 trillion to Rp248.8 trillion.

    Its outstanding credits totaled Rp574.7 trillion by the end of the first quarter of the year, and 85.7 percent of the credits were categorized as productive credits, Kartika said.

    Infrastructure credits totaled Rp46.42 trillion and credits for micro, small and medium enterprises (UMKM) reached Rp74.6 trillion.

    Its people credit facility called KUR reached Rp3.7 trillion or 28 percent of the whole years target of Rp13 trillion with 466,000 recipients in the first quarter of the year.

    Earlier a bank director Tardi said the target set for this year is more than quadrupling the target of only Rp3.2 trillion in 2015.

    The bank has established more small branch offices in the regions to facilitate disbursement of KURs for micro, small and medium enterprises.

    The small branch office would bring the bank closer to small depositors, Tardi said.

    In 2016, Bank Mandiri hopes to increase the number of its small branch offices to around 400 units all over the country.

    By April 2016, at least 26 new units have been in operation and by September the remaining 374 units are expected to be ready for operation.

    With the additional branch offices, the bank hopes to expand its market among the small and medium enterprises, which have proved more resistant to economic crisis.

    The small and medium enterprises provide a potential market for banking business in the country, banking observers have said.

    Currently, Bank Mandiri has 3,021 outlets including 600 units of kiosk all over the country.

    Bank Mandiri also has 17,000 agents for financial services without office for inclusive finance in various areas in the country.

    They include 8,759 individual agents and the rest institutional agents .

    In 2015, the bank reported a better-than-expected net profit but its bad loans crept up partly due to its exposure to the commodities sector.

    The bank posted a net profit of Rp20.3 trillion in 2015, or about 2 percent higher than in 2014.

    Its outstanding credits surged 12.4 percent to Rp595.5 trillion.

    Growth in net profit was the smallest in a decade, as the bank stepped up provisions. But the lenders 2015 profit was still higher than the average forecast of Rp19.59 trillion.

    Its gross non-performing loans (NPL) rose to 2.60 percent of total loans by the end of 2015, from 2.15 percent in the previous year.

    Gross NPL is predicted to be around 2.5 percent to 3 percent in 2016, Kartika has said.

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  • Profit of CIMB’s Indonesian ops grows by over three times

    Profit of CIMB’s Indonesian ops grows by over three times

    CIMB Niaga said in a statement, posted by its parent on Bursa Malaysia’s website, that the improved net profit came on the back of a 1.4% yoy increase in net interest income and a 18.5% yoy jump in non-interest income, mainly due to improved foreign exchange and capital market businesses.

    Operating expenses and provisions declined by 1.4% and 7.3% on a yoy basis respectively. “While we remain cautious given the economic situation, we hope our positive performance this quarter will provide a strong base for our results going forward. Our operating income held up well through strong contributions towards non-interest income from an uplift in the treasury business.

    “Our credit card business continued to garner market share, while current account and savings account (CASA) balances grew strongly, bringing about a CASA ratio of 52.05%.

    “CIMB Niaga capital ratio strengthened to 18%. Our improved capital position should hold us in good stead to face the market and economic uncertainties,” said CIMB Niaga president director Tigor M. Siahaan in the statement.

    With total assets of 231.67 trillion rupiah (RM68.54bil) as of March 31, CIMB Niaga maintained its position as Indonesia’s fifth largest bank by assets.

    Total gross loans were lower at 171.02 trillion rupiah (RM50.60bil) as at March 31 as the bank maintained a conservative growth strategy.

    Despite the slower growth in CIMB Niaga’s loans, several business segments posted positive expansion such as personal loans and credit cards.

    “We continue to pursue our aspiration of being a leader in digital services by focusing on customer experience and optimising the use of the latest technology to bring value to our clients,” Tigor said.

    In the syariah banking segment, CIMB Niaga’s Islamic business unit’s total financing stood at 7.60 trillion rupiah representing a growth of 13.9% yoy with third-party deposits of 8.16 trillion rupiah as at March 31.

    CIMB Niaga’s capital adequacy ratio (CAR) strengthened to 18% as at March 31, 2016.

    “The government has proposed some positive changes since the start of the year to boost the economy. Bank Indonesia cut interest rate to 6.75% from 7.50% and the government has also lined up several economic stimulus packages for 2016. I’m confident that as CIMB Niaga remains focus in the areas of asset quality, cost efficiency and CASA growth, the bank will be primed to capitalise on opportunities when the economy improves,” added Tigor.

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  • South Korea’s Shinhan expands in Asian retail banking

    South Korea’s Shinhan expands in Asian retail banking

    Through steady no-nonsense efforts focusing on retail banking, Shinhan Financial Group has grown to operate more than 150 overseas branches, the most among South Korean financial institutions. Although much smaller than counterparts from Japan, the U.S. and Europe, Shinhan continues to boldly expand operations in such Asian markets as Vietnam and Indonesia.

    The bank set up a presence in Vietnam in 1993, following Samsung Electronics, LG Electronics and other South Korean conglomerates into the Southeast Asian country. It plans to open four branches there within the year, bringing the total to 18. This should make Shinhan the foreign financial institution with the most branches there.

    As a part of efforts to expand further in the country, the bank has been focusing on boosting lending to individuals. Because wages are low and people tend to change jobs frequently, foreign financial institutions are generally reluctant about extending personal loans in Vietnam, but Shinhan has found a “unique sales approach” for reducing loan default risks. The bank’s salespeople have been visiting labor unions at various factories to seek information on workers who have been working steadily for more than a year or two, since these people would make more secure borrowers.

    All over Asia

    Shinhan traces its roots to Shinhan Bank, which was established in 1982, using funds raised from ethnic Koreans living in Japan as a part of its start-up capital. Following the opening of a branch in Osaka in 1986, the group has maintained close ties with Japan. In its home country, the group has grown on its strength in retail banking.

    With Shinhan Bank at its core, the group now operates more than 150 overseas branches. This puts it ahead of Hana Financial Group to rank No. 1 among South Korean financial institutions in terms of the number of foreign branches, according to research firm CEO Score.

    “We will secure the engine for new growth in the global market, centering on Asia,” Chairman Han Dong-woo said at a general shareholders meeting in March.

    True to his words, Shinhan has been pushing further into other Asian countries. In Indonesia, the group has acquired Centratama Nasional Bank, which has 41 branches, as well as Bank Metro Express, which operates 19. In addition, credit card unit Shinhan Card has a joint venture with local conglomerate Salim Group.

    In Myanmar, Shinhan received approval to open a branch last month, a first for a South Korean bank. The group aims to tap into demand for retail financial services by bringing its credit card and insurance units into the Southeast Asian country.

    Small but solid

    Moody’s has given Shinhan Bank an Aa3 credit rating, one rung above that of Bank of Tokyo-Mitsubishi UFJ. However, Shinhan Financial Group still pales in comparison to Mitsubishi UFJ Financial Group in scale, as its 370 trillion won ($326 billion) in consolidated assets as of the year ended in December are equivalent to just 12% of the Japanese megabank’s total assets. The Japanese banking group also operates a far larger overseas network, counting more than 1,150 branches as of the end of September.

    But Shinhan Bank is set to continue its steady growth by “making the most of its speed and strength in retail sales,” said Executive Vice President Heo Young-taek.

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  • DBS introduces a mobile-only bank in India

    DBS introduces a mobile-only bank in India

    Singapore’s DBS Bank has launched what it says is India’s first mobile-only bank. Dubbed digibank, the mobile app functions as an entirely paperless, signatureless and branchless bank for India’s residents.

    The initiative aims to break away from conventional banking norms such as form filling and other cumbersome processes.

    Account-opening can be done easily and effortlessly at an extensive network of outlets run by DBS’ partners, including over 500 cafes across India. No paperwork will be involved and instead, customer authentication is done purely using the Aadhaar card, a biometrics-enabled ID which has been issued to over 1 billion Indians.

    Other digibank features include 24/7 customer service provided by a real-time, AI-driven virtual assistant, which understands natural language and is incorporated with the ability to anticipate and answer some 10,000 customer questions.

    This AI feature was made possible due to DBS’s partnership with US-based fintech Kasisto. The latter is a spin-off from SRI International which created the technology behind Apple’s Siri.

    In-built into digibank is a budget optimizer that helps customers do their budgeting, track expenses and analyze purchasing trends. The function is equipped to understand customer behavior and preferences, synthesize data, and provide recommendations.

    The budget optimizer also studies customers’ spending patterns and prompts them if they are overspending. Conversely, if a customer’s savings regularly exceed his or her expenditure, digibank will provide suggestions on how to make one’s money work harder.

    Dynamic inbuilt security, which is safer than OTP, is employed in digibank. Most bank customers are used to receiving One-Time Passwords (OTPs) via SMS, and then typing codes into pages to authorize their mobile banking transactions. digibank has an embedded soft token security, avoiding the need to wait for SMSs to arrive and providing even stronger security for transaction authorization.

    The new offering also gives account-holders earn 7% interest from the first rupee, one of the highest in the market with no minimum balance requirements. Customers receive a physical debit card which can be used across all Visa-enabled online and POS transactions, as well as overseas. Free cash withdrawals will be available at more than 200,000 ATMs nationwide.

    Said DBS CEO Piyush Gupta, “India’s banking system is at the cusp of massive change, and as a bank committed to shaping the future of banking, we are excited to roll out a revolutionary, mobile-only bank. With digital, we are able to create a completely different customer experience. What’s more, digibank’s efficiencies and lower costs enable us to pass on significant benefits to customers in the form of greater customer value.”

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  • Bank Indonesia Wins 3 CSR Awards

    Bank Indonesia Wins 3 CSR Awards

    Bank Indonesia (BI) has received three awards in the The 8th Annual Global Corporate Social Responsibility (CSR) Summit and Awards. Two gold awards are for Excellence in Provision of Literacy and Educational Award with market capitalization above US$1 billion and Empowerment of Women Award. While bronze award was achieved for Product Excellence Award.

    BI’s Communication Department Director Abronas Hutabarat attended the event to receive the awards. He originally intended to attend the international forum to introduce BI’s CSR programs. “We didn’t expect to receive the awards. These are the result of synergy and hard work put in by my colleagues in BI’s Communication Department,” Abornas said after receiveing the awards in Nusa Dua, Bali, Thursday evening.

    Abornas said that BI always made CSR programs on a yearly basis which focus on community empowerment. According to him, BI’s CSR programs are comparable to those of its international counterparts.

    There are seven categories in The 8th Annual Global CSR Summit and Awards, namely Best Environmental Excellence Award, Best Community Programme Award, Excellence in Provision of Literacy and Education Award, Empowerment of Women Award, Best Workplace Practice, CSR Leadership Award, and Product Excellence Award.

    Of the categories, BI got nominated in 4 categories. Arbonas said the four categories are Best Community Programme Award, Excellence in Provision of Literacy and Education Award, Empowerment of Women Award, and Product Excellence Award.

    Arbonas said one of the gold awards were given for BI Corners CSR program, in which BI provides libraries in all universities in Indonesia. Last year BI built 106 BI Corners. This year BI is targeting to build 150 BI Corners. He hoped that in the next five years BI could build 1,000 BI Corners in the all educational levels to support financial literacy. In addition, BI helps female entrepreneurs in managing business units and bookkeeping to make the businesses bankable.

    The Annual Global CSR Summit and Awards is the most prestigious recognition awards program for Corporate Social Responsibility of various agencies in Asia. The awards are given to agencies who are able to make contributions to environmental sustainability, product innovation, community empowerment and CSR management and transparency.

  • BNI chalks up Rp2.9 trillion in net profit in first quarter

    BNI chalks up Rp2.9 trillion in net profit in first quarter

    Publicly traded lender PT. Bank Negara Indonesia Persero Tbk reported Rp2.9 trillion in net profit in the first quarter of this year up 5.5 percent year-on-year.

    The profit was attributable mainly to net interest income especially interest on infrastructure credits, Achmad Baiquni, the president director of the state owned bank said here on Tuesday.

    Its net interest income grew 13.3 percent to Rp6.91 trillion in the first three months of 2016 from Rp6.09 trillion in the same period last year.

    “The net interest margin (NIM) of the bank was 6.1 percent in the first quarter of this year,” Baiquni said.

    The NIM of the countrys fourth largest bank in asset, rose with a strong 21.2 percent growth in credits to Rp326.74 trillion in the January-March period of 2016 from Rp269.51 trillion in the same period in 2015.

    Credits for the business and consumption sectors were the largest contributors to its credit expansion, Baiquni said.

    Credits for the business, which grew 22.7 percent (yoy) to Rp234.2 trillion in the first quarter of 2016, accounted for 71.7 percent of the banks total credits.

    Credits for the construction sector surged 127.5 percent to Rp5.99 trillion and credits for the consumption sector rose 9.8 percent to Rp57.56 trillion in the first quarter of 2016.

    The bank also recorded an increase in fee based income , up 16.4 percent to Rp2.22 trillion .

    The third party funds held by the bank rose 21.8 percent (yoy) to Rp371.5 trillion in the first quarter of 2016 .

    Cheap funds accounted for 58.5 percent or around Rp217.5 trillion of the third party funds – or an increase of 12.9 percent (yoy).

    The credit expansion that grew 21.2 percent and the third party funds that increased 21.8 percent resulted in 25 percent rise (yoy) in its assets to Rp509.09 trillion in the first quarter of 2016 .