Mega eyes 60% rise in lending this year

The Jakarta Post ,  Jakarta   |  Tue, 08/21/2007 7:23 AM  |  Business

The Jakarta Post, Jakarta

Publicly listed Bank Mega is optimistic lending will grow by 60 percent this year on the back of a surge in demand from corporate borrowers.

President director Yungky Setiawan said at a press gathering here Monday that the bank's outstanding loans grew by about 10 percent as of the end of June to Rp 11.5 trillion (US$1.21 billion) from the same month in 2006.

With the new demand, particularly from corporate borrowers, total lendings are expected to jump to about Rp 17.6 trillion by the end of December, or an increase of about 60 percent from Rp 10.99 trillion at the end of 2006, he said.

Director for credits Daniel Budirahaju said Bank Mega was currently processing credits of nearly Rp 9 trillion, around Rp 2 trillion of which had been agreed upon.

He said the bank would set aside 45 percent of total credits for corporations, around 40 percent for consumers and around 15 percent for the commercial sector.

Besides enjoying a sharp growth in credits, Bank Mega also experienced a significant rise in its third-party funds to Rp 25.5 trillion as of June 2007, or about 19.5 percent higher than the Rp 21.3 trillion as of June 2006.

Yungky said the increase was a result of the introduction of new savings products and growth in demand deposits of small and medium enterprises (SMEs).

As of June, demand deposits and savings accounted for 34 percent of total third-party funds, while time deposits made up the remaining 66 percent.

This, said Yungki, was a slight change from the composition as of June 2006, when demand deposits accounted for 23.2 percent and time deposits 76.8 percent.

With increases in both loans and third-party funds, Bank Mega is optimistic about achieving its target of increasing net income by nearly 400 percent to Rp 750 billion in 2007 from Rp 151.7 billion last year.

In the first half, it booked a net income of Rp 271.6 billion, an increase of around 280 percent from Rp 71.36 billion in the same period last year.

The bank plans to increase the number of its branch offices from 152 at present to 188 by the end of 2007, to cope with a surge in customer numbers.

Bank Mega also plans to issue bonds worth Rp 1 trillion in the fourth quarter of the year to strengthen its capital structure.

Bank Mega is a subsidiary of Para Group, which is also the holding company of Trans TV and Trans 7 television stations. (11)

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