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BI Securities, a unit of Japanese investment firm SBI Holdings, has agreed to acquire a 25 percent stake in PT BNI Securities for Rp 114 billion (US$16.70 million), parent company Bank Negara Indonesia (BNI) announced Wednesday.

BNI president director Gatot M. Suwondo said that the Japanese company would acquire the 25 percent stake in BNI Securities through the purchase of new shares to be issued by the securities company.

As the acquisition would be carried out through the purchase of new shares, the proceeds from the sales of the shares will be used to strengthen BNI Securities’ capital structure, he said, adding that the issuance of the new shares would consequently cause a dilution in BNI’s ownership from 100 percent to 75 percent.

BNI Securities will issue new shares totaling 25 percent of the enlarged equity. The proceeds will be used to boost BNI Securities’ capital,” Gatot told a press conference at his office in Jakarta.

Established in 1999, SBI Securities is among the pioneers of online securities trading in Japan.

“Within 11 years, SBI Securities can control Japan’s retail securities market. We therefore want it to form a partnership with BNI Securities to expand our retail market,” Gatot said.

BNI Securities president director Jimmy Nyo said he expected the Japanese company’s acquisition plan would receive approval from the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) before the end of the second quarter of this year.

“We will issue about 33 million new shares for the acquisition plan. We currently have 100 million shares.”

BNI also announced Wednesday that its net profits rose by 22 percent to Rp 1.25 trillion during the first quarter of this year from Rp 1.03 trillion in the same period last year on the rise in non-interest income, which increased 8 percent to Rp 1.49 trillion versus Rp 1.38 trillion the previous year.

Meanwhile, net interest income remained almost unchanged at Rp 2.89 trillion in the January-March period despite a 16.6 percent increase in lending growth to Rp 138.65 trillion at the end of March of this year. BNI targeted 17 to 20 percent lending growth this year, Gatot said.

There was no significant increase in interest income during the first three months of this year because the bank charged lower interest rates during the three-month period, BNI finance director Yap Tjay Soen said. The net interest margin fell to 5.7 percent compared with 5.8 percent in the first quarter of last year.

Gross non-performing loans (NPL) were higher than average at 4.1 percent mainly due to bad debts in small businesses. “Small businesses’ NPL stood at 10 percent this year. In the future, we want to focus on the manufacturing industry to ensure the prudent disbursement of loans,” Gatot said.

Third party funds grew slightly by 7.8 percent to Rp 188.64 trillion as of March 31 of this year, bringing BNI’s loan-to-deposit ratio (LDR) up to 73.3 percent versus 67.2 percent in the first three months of 2010.

“We target our LDR to range between 75 to 78 percent this year,” Gatot said, in reference to the central bank’s regulation that requires banks’ LDR to reach 78 percent to boost lending otherwise the banks will have to pay penalties.