Top banks report mixed results in Q1

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Tue, 04/29/2008 12:40 PM  |  Business

Top Indonesian banks reported mixed results in financial performance for quarter one 2008 given economic uncertainties.

Bank Mandiri, the country's largest bank in terms of assets, reported a 35 percent increase in net profits compared to quarter one last year, as gains from reduced costs of funds made up for declining net interest income.

Mandiri's net profit rose to Rp 1.39 trillion (US$151 million) from Rp 1.03 trillion a year earlier, while net interest income fell 11 percent to Rp 3.38 trillion, Mandiri vice director I Wayan A. Mertayasa said Monday.

On loans, Mertayasa said Mandiri lent Rp 135.5 billion in quarter one 2008, an 18.6 percent increase from Rp 114.3 billion on the first quarter of 2007, with much improved figures for nonperforming loans, falling from 4.7 percent in quarter one of 2007 to 1.3 percent in the same period in 2008.

Separately, the second largest lender, Bank Central Asia (BCA), reported a 9 percent increase in net income from Rp 1.1 trillion in quarter one 2007 to Rp 1.2 trillion in the same period in 2008.

BCA disbursed Rp 8.31 trillion in mortgage loans, an enormous 93 percent rise from Rp 4.3 trillion a year earlier, BCA director Jahja Setiaatmadja said.

Bank Negara Indonesia (BNI), the third largest bank, meanwhile, said its net profit suffered a 61.7 percent decline in the first quarter of 2008, compared to the same period last year reflecting higher provisions for losses.

President director Gatot Suwondo said BNI posted a net profit of Rp 153 billion, down from Rp 400 billion in the first quarter of 2007, after the bank also raised its net risk coverage ratio by increasing provisions for credit losses by a fullsome 92.5 percent from Rp 623 billion to Rp 1.2 trillion.

Gatot said BNI would have recorded a 14.6 percent increase in net profit had the bank not increased the risk coverage ratio.

Despite declining profits, BNI managed to lend more in quarter one 2008. Its loan-to-deposit ratio stood at 70.5 percent, up significantly from 48.9 percent compared to quarter one 2007.

Its net nonperforming loans, meanwhile, fell from 10.5 percent to 8.6 percent, remaining rather high compared to some banks.

Another bank included in the country's top-10 lenders, Bank Niaga, reported a modest 3 percent rise in net profit from Rp 201.7 billion in the first quarter of 2007 compared to Rp 207.2 billion in quarter one this year.

Niaga is controlled by Malaysia's second largest financial company CIMB.

As of March, the bank lent Rp 43 trillion, up from Rp 40.7 trillion during quarter one 2007, said Niaga chief financial officer Catherine Hadiman.

Catherine said the bank expected lending to grow by about 22 percent this year despite the threat of inflation and the possibility of an interest rate hike from the central bank.

The central bank said it expects bank lending to grow by between 22 percent and 24 percent this year. (anw/ewd)

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