Major banks report solid Q1 results

The Jakarta Post , Jakarta | Fri, 04/27/2007 3:30 PM | Business

Urip Hudiono, The Jakarta Post, Jakarta

Indonesia's banking sector appears to have shrugged off last year's mini-recession and to have started this year with a bang, with most major lenders booking higher first-quarter profits on higher lending growth.

Bank Rakyat Indonesia (BRI), Bank Danamon and PermataBank are the latest banks to follow Bank Mandiri, Bank Niaga and Bank International Indonesia (BII) in reporting sound performances for the first three months to the end of March. All of the banks are on the list of the nation's top 10 lenders.

State-owned BRI, the country's fourth largest lender by assets, saw its net profit for the first quarter rise by 4 percent to Rp 1.22 trillion (US$134 million) from the same period last year, as its loan book grew 19 percent to Rp 91 trillion, BRI president Sofyan Basyir said in a statement Thursday.

The bank booked net interest income of Rp 3.96 trillion, up 21 percent from last year's first quarter. Most of the bank's additional lending went to the SME sector.

BRI's total deposits as of the end of March stood at Rp 121.9 trillion, while its assets amounted to Rp 152.1 trillion.

Announcing even more impressive profit growth, Danamon, the country's fifth largest lender, said its after-tax profits nearly doubled by 92 percent to Rp 482 billion during the first quarter.

Danamon's loan book grew 18 percent to Rp 43.1 trillion as of the end of March, its president, Sebastian Paredes, said, resulting in net interest income of Rp 1.65 trillion.

The bank, which is majority-owned by a consortium of Singapore's Temasek and Germany's Deutsche Bank, had total assets of Rp 84.9 trillion as of the end of the quarter.

Meanwhile, Permata, which is owned by a consortium led by local auto distributor Astra International and the UK's Standard Chartered Bank, reported first quarter after-tax profits of Rp 73.9 billion, up 14 percent from the same period last year.

The profits were mostly derived from a 37 percent increase in the bank's net interest income to Rp 595.6 billion. Its lending grew 7 percent to Rp 23.8 trillion as of the end of March.

Permata president Stewart D. Hall said the bank's loan to deposit (LDR) and non-performing loan (NPL) ratios were 87 percent and 3 percent, respectively, as of the end of the quarter.

State-owned Mandiri, Indonesia's largest lender by assets, announced its first quarter results last week, which showed a doubling of net profit to Rp 1 trillion.

Mandiri increased its total outstanding loans as of the end of March to Rp 105.6 trillion, having finally lowered its NPL ratio to a net level of 4 percent -- just below the central bank's 5 percent ceiling for the industry.

The country's banks are currently striving to improve their financial performances, including increasing lending growth and their LDRs, as reducing NPL levels, in a bid to become ""anchor banks"", that is to say, banks that be in the vanguard of the planned consolidation of the industry by 2010 through a process of mergers and acquisitions.

Bank Niaga, the country's seventh largest lender, also reported good results last week, with profit rising by 18 percent to Rp 647.7 billion on a loan book that grew by 9 percent to Rp 2.3 trillion as of the end of March.

Only BII reported worse results -- a 10 percent decline in its first quarter profit to Rp 201 billion, despite lending growth of 14 percent to 26.4 billion from the same period last year.

Indonesia's banking sector suffered from high inflation and interest rates since 2005, which caused a slump in loan demand, with industry lending growing by a disappointing 14 percent to Rp 792.3 trillion last year. Bank lending continued to decrease in January, before picking up again to Rp 783.5 trillion in February.

Comments (0) | Post comment

A | A | A |