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BRI targets 22 percent increase in lending
State lender Bank Rakyat Indonesia (BRI), the country's second-largest bank by market value, expects a growth of up to 22 percent in new loans this year
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State lender Bank Rakyat Indonesia (BRI), the country's second-largest bank by market value, expects a growth of up to 22 percent in new loans this year.
The bank based its prediction on expected higher lending demands from the agriculture and small and medium enterprise sectors.
"Last year we set platforms on farming revitalization, so we expect to execute those platforms this year, which basically means increasing new loans to that sector. And of course to SMEs," president director Sofyan Basir told the press Thursday.
The bank saw the recent trend of high prices in key agricultural commodities as a good opportunity to continue focusing its loans on SMEs and agriculture sectors, he said.
The lending growth target was just about the same as what the bank had achieved in the past several years, Sofyan said.
At of the end of 2007, the bank's outstanding loans amounted to Rp 113.85 trillion, or up by 26.11 percent from a year earlier when they stood at Rp 90.28 trillion.
The bank's loan to deposit ratio (LDR) reached 68.80 percent as of last December.
Still, while the bank has been channeling loans aggressively over the years, Sofyan said it managed to conduct the risk-assessment principle prudently -- evident in the low level of its performing loans (NPLs) ratio.
The bank's NPLs ratio at the end of last year stood at 3.44 percent, below the maximum requirement level of 5 percent--set out by the central bank.
BRI last year recorded a 13.63 percent increase in net profits from 2006. It booked Rp 4.8 trillion in net profits, compared to Rp 4.2 trillion the year before.
"Last year's saw BRI become the top Indonesian bank in terms of profits," Sofyan claimed.
Last year's lending growth contributed 77.41 percent to the bank's total interest income which reached Rp 23.2 trillion, a 10.3 percent increase from the previous year.
According to Sofyan, the net interest income contributed to 91 percent of the bank's profits, while operating income contributed 7 percent and others 2 percent.
Turning to this year's target, Sofyan said the bank, which has been focusing on small customers in rural areas, would start targeting big-time debtors from urban areas.
Currently, more than 80 percent of the bank's outstanding loans are channeled to the SMEs.
BRI's total assets, as of Dec. 31 last year, amounted to Rp 154.7 trillion, a 31 percent increase from a year earlier, making it the country's third largest lender by assets after Bank Mandiri and Bank Central Asia (BCA). (rff)
