BNI profits up 23% on credit, fee income
Good job: (From left) Bank Negara Indonesia (BNI) finance director Yap Tjay Soen, BNI president director Gatot M Suwondo, BNI operational director Suwoko Singoastro and BNI treasury and financial institution director Adi Setianto pose in front of reporters after its first quarter financial report in Jakarta on Monday. The publicly-listed bank’s net profits surged to Rp 1.54 trillion (US$162.75 million) in the first quarter this year, up by 23 percent from Rp 1.252 trillion during the same period last year. JP/NurhayatiState-owned PT Bank Negara Indonesia (BBNI), the nation’s fourth-largest lender, reported a 23 percent increase in net profits in the first quarter of this year from a year ago, thanks to higher income from interest and transaction fees.
The lender, commonly known as BNI, reaped a Rp 1.54 trillion (US$164.78 million) net profit in the January-March period amid “moderate” loan growth of 18.9 percent to Rp 138.65 trillion in outstanding loans, president director Gatot M. Suwondo said.
“We will maintain our moderate target of growth this year,” Gatot told a press briefing on the bank’s financial results on Monday.
Nationwide commercial banks are aiming for 23.6 percent loan growth in 2012, and up to March this year, lending had grown 24.9 percent year-on-year, according to Bank Indonesia (BI) data.
Despite slower loan growth than the overall banking industry, BNI booked a 20.9 percent increase in interest income to Rp 3.49 trillion during the first three months of this year compared with the same period last year.
Non-interest income, including fee-based income from transactions, grew 14.2 percent to Rp 1.69 trillion during the same period.
BNI’s ratio of non-performing loans declined to 3.6 percent as of the end of March this year from 4.1 percent in the same month of 2011.
As much as 35.4 percent of BNI’s total lending was disbursed to companies, 34.9 percent to small and medium enterprises, and 21.8 percent to consumer and retail segments with the remaining 7.9 percent allocated to support the company’s subsidiary and international businesses.
Although consumer and retail lending ranked third in terms of overall lending, it grew by a significant 32.7 percent from a year earlier.
Mortgage was the main contributor to growth with Rp 19.4 trillion in the first quarter of the year, up 49.8 percent from the same quarter in 2011.
BNI also reported a 10.4 percent year-on-year increase in credit card usage, which reached Rp 3.99 trillion in the first quarter.
Commercial and retail director Darmadi Sutanto said that the bank was optimistic that mortgage loans would keep growing despite the central bank’s plan to implement regulations requiring a minimum down payment of 30 percent this June.
“We will increase our channel with high-class developers to boost sales for high-class customers, who will keep buying despite the increase in the minimum down payment,” Darmadi said.
To meet the growing demand for credit, especially overseas, BNI is in the process of issuing five-year US dollar-denominated debt papers which offer a 4.12 percent yield.
Gatot said that the bonds were oversubscribed by six times. “Despite the oversubscription, we won’t increase it because the amount fits our needs.”
US dollar-denominated lending in may increase, given that BNI currently has 1,842 outlets and credit centers nationwide as well as five overseas branches, in Singapore, Hong Kong, New York and London. The company also has representative offices in several Middle Eastern and Southeast Asian countries.
“We want to strengthen the performance of our branches overseas, which previously borrowed from the central office for their foreign currency credits. In the future, we want overseas offices to become independent,” Gatot said.
Shares in BNI traded at Rp 3,625 apiece on Monday, down 0.68 percent from the previous day. The stock has fallen 3.07 percent so far this year.