Citigroup Summary Takeaways from Citi Indonesia Investor Conference – Day 1, Bank CIMB Niaga (BNGA.JK;Rp1,130;Analyzed Not Rated)

 Takeaways from Jakarta — Bank CIMB Niaga presented at Citi's Indonesia
Investor Conference on Aug.4-5.Below are key takeaways.

 Strategy — Operating environment is favorable and with merger pains
behind,focus is now on growth.Target loan growth is 20%pa with a focus
on increasing margins and diversifying revenue stream.This includes higher
loan growth in Auto (4W),Micro (high-end and pawn shop)and Syariah
(retail).

 Diversifying revenue stream — Transactional banking will be the focus to
diversify revenue stream (L/C)and other trade-related services.

 Pressures on yields — Competition in mortgages is strong and bringing down
yields.Rates for BNGA are down to 9.25%(lowest is 8.8%)with the risk of
further decline (first two year rates only).Increase in BI rates impacts with a
2-3 year lag on mortgage and auto loans.Auto loans NPLs are 50bps lower
than mortgages.

 CASA — Raising CASA from 48%to 60%in the next two years is a
challenge.Already has 3mn deposit accounts and charges Rp5,000 to
Rp9,000 per month as administration fees.