Indonesia's top banks continue to post remarkable growth in profits in the first nine months this year, weathering the storms of negative impacts from the global financial crunch.
Two of Indonesia's largest banks, Bank Central Asia (BCA) and Bank Rakyat Indonesia (BRI), posted hefty increases in profits and revenues between January and September, according to reports issued Friday.
BCA, Indonesia's third-largest bank by assets, reported a 27 percent rise in net profits in the first nine months this year to Rp 5.09 trillion (US$531 million) from Rp 3.99 trillion booked in the same period of 2008 due to an increase in net interest income despite a modest single digit growth in lending expansion.
Net interest income increased 31.5 percent to Rp 11.25 trillion, BCA vice president director Jahja Setiaatmadja said in a press briefing.
BCA aims to have loan growth of 8 percent in 2009, having scored 6.5 percent growth in the third quarter, he added.
Lending rose to Rp 112.4 trillion between January and September this year from Rp 105.55 trillion in the same period of 2008. Third-party funds saw a 21.5 percent increase to Rp 234.3 trillion.
The central bank has estimated lending may grow less than 15 percent this year, far below the 30 percent growth booked in 2008, as demand for loans falls.
BRI, Indonesia's second-largest bank by assets, also posted a solid performance as net profits in the first nine months this year rose 25.08 percent to Rp 5.3 trillion from Rp 4.24 trillion booked in the same period of 2008.
BRI's outstanding loans rose 26.92 percent to Rp 192.23 trillion between January and September from Rp 151.46 trillion in the same period last year, BRI director Abdul Salam said.
Third-party funds rose 25.48 percent to Rp 220.08 trillion from Rp 175.39 trillion booked in the same period last year.
The central bank expects lending to recover in 2010 with a 17 percent growth.
The strong performance by the two lenders seems to follow the sound showing of the banking industry. Bank Mandiri, CIMB Niaga and Bank Permata - the nation's largest, fifth-largest and eight-largest banks by assets, respectively - have all shown profit growth in the first nine months this year.
And the trend will likely continue in the last quarter of the year, with the central bank facilitating a further decline in deposit interest rates charged by banks, which could eventually cut interest rates for lending, thus spurring loan demand.
The central bank invited 14 large banks Friday to discuss the issue to strengthen their commitments, made on Aug. 20, to cut deposit rates to 150 basis points above the BI rate. After three months they will further cut the rates down to 50 basis points above the BI rate.
BI's benchmark interest rate currently stands at 6.5 percent.
