Commonwealth Bank's Indonesian banking subsidiary suffered a sharp fall in profitability in the March quarter, according to financial accounts lodged with regulators in Jakarta.PT Bank Commonwealth recorded a profit of 7 billion rupiah in the three months to the end of March - a slide of more than 88 per cent on the 61 billion rupiah bottom line profit for the corresponding period last year.In Australian currency terms, the March quarter result translates into a profit of around A$678,000 compared to the $6 million bottom line for the same period in 2017.PT Bank Commonwealth balances its full year accounts on 31 December and posted an annual profit of 109 billion rupiah ($10.5 million) in 2017.However, the operating performance of the business has been extremely volatile.In 2016, the bank recorded a net loss of 420 rupiah ($40.6 million) mainly on the back of soaring provisions to cover impaired loans.The subsidiary is continuing to widen its lending and deposit-taking activities at double-digit rates of growth.However, CBA chief executive Matt Comyn has signalled plans to simplify the group's operations by offloading businesses that cannot match the returns of the core banking franchises in Australia and New Zealand.On almost every performance measure, the Indonesian subsidiary qualifies as a candidate for disposal.Its return on equity was only 2.3 per cent in 2017 and has never exceeded 6.5 per cent since 2013.The returns were negative in 2015 and 2016.CBA's decision to persist with the business can only be explained through the comparatively high interest margins it has enjoyed since entering Indonesian banking twenty years ago.While net interest margins have been crunched to around two per cent in Australia since 2013, they have been rising in the Indonesian banking sector.PT Bank Commonwealth has managed to grow its NIM by 50 basis points in the last five years to above five per cent.Comyn's predecessor Ian Narev championed the bank's expansion strategy in Indonesia. Narev wanted to grow the subsidiary into a full service commercial bank, which was evidenced in June last year when the company began marketing an unsecured loan product to small business borrowers.Given Comyn's focus on de-risking the group's operations, it's hard to see how Narev's vision will ever be achieved.CBA's long-term strategy has been to transform the business into a digital bank by leveraging the distribution technology of its Tyme Digital arm in South Africa.PT Bank Commonwealth's latest annual report is replete with details about the installation of Tyme electronic kiosks across its distribution network, which its "board of commissioners" believe will help put the business on a sustainable footing."Given Indonesia's economic development and the government's ability to cope with socio-economic issues, the Board of Commissioners believes that Commonwealth Bank growth will continue towards sustainability," the commissioners said in the annual report."Commonwealth Bank also continues with digital transformation."The Board of Commissioners is committed to fully supporting the Bank's strategies and plans, so that they can result in providing competitive advantages to the Bank in the future."While the board of the Indonesian arm is hoping that