BII's total loans to increase 20%

The Jakarta Post ,  Jakarta   |  Wed, 02/27/2008 12:08 PM

The country's sixth largest lender, publicly listed PT Bank Internasional Indonesia (BII), said it would target an increase of more than 20 percent in total loans this year.

"Out of the total credits, 40 percent will be channeled to small and medium enterprises (SMEs), 31 percent to consumers and 28 to 29 percent to corporates," vice president Sukatmo Padmosukarso told reporters Tuesday.

BII increased its total credits from Rp 26.26 trillion (about US$2.87 billion) in 2006 to Rp 33.06 trillion in 2007.

In spite of increased credits, its net profit declined by 36 percent to Rp 404.76 billion last year, from Rp 633.71 billion a year earlier, due to lower net interest income and smaller margins.

"The bank will keep focusing on facilitating credits for SMEs and consumers and we will also increase our standard of credits and services," Sukamto said.

The bank will also continue giving credits to mining, coal, transportation, telecommunications, manufacturing and CPO businesses.

He said the highest demand for credits in the infrastructure sector, including companies related to electricity, came from Java.

The highest demand for credits in the agribusiness sector was from outside of Java.

Sukatmo said Singapore state investor Temasek Holdings had decided to divest all its shares in BII, worth $700 million, possibly before the deadline at the end of December 2010.

"The divestment of Temasek will not affect our business.

"The growth of the business is relatively good and supported by lower interest rate," he said.

Temasek's Fullerton Financial Holdings since 2003 has owned 75 percent of shares in Sorak consortium, which in turn owns a 55.85 percent stake in BII.

The divestment of Temasek was a response to the central bank's single presence policy released late last year.

The central bank forbids the same shareholder from owning majority stakes in more than one bank.

Temasek, through Fullerton, owns stakes in the country's fifth largest lender, publicly listed PT Bank Danamon.

The policy has led Temasek to choose Danamon rather than BII.

BII's performance was a sharp contrast to Danamon, which booked a 60 percent rise in its 2007 net profit. (rff)

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