State-owned Bank Negara Indonesia (BNI) enjoyed a 21 percent increase in net profits last year on the back of a rise in credit disbursements, which was in line with overall growth in the banking industry, and recovery of bad debts.
BNI booked Rp 7.1 trillion (US$731 million) in net profits last year, a significant increase compared to the Rp 5.8 trillion it reaped a year earlier.
“Lending growth, as the source of interest income, and other activities contributing to BNI’s fee-based income were the main factors of the net profit increase,” BNI president director Gatot M. Suwondo said on Thursday.
BNI’s lending reached Rp 200.7 trillion last year, a 22.8 percent increase compared to 2011. In comparison, national credit growth stood at 23 percent, according to the central bank.
Gatot said that about 74 percent of the total credit was disbursed to productive sectors across all segments from corporate to retail. “We keep our focus on eight key sectors, which are agriculture, communications, electricity, retail, oil and gas, construction, food and beverages and chemicals,” Gatot said.
BNI’s net interest income rose 17.1 percent to Rp 15.5 trillion last year, while its fee-based income surged 11.1 percent to Rp 8.4 trillion.
The fourth-largest bank by assets said that it had witnessed lower yields from credit disbursed last year, namely 10.6 percent, down from 11 percent in 2011.
However, the company said that its cost of funding had fallen to 2.7 percent in 2012 compared to 3.5 percent in 2011.
“We will continue to focus on saving and current accounts to maintain high a net interest margin [NIM]. We don’t want to fight for an increase in deposits,” Gatot said.
The bank’s NIM stood at 5.9 percent as of the end of last year, a slight decline from 6 percent the previous year. Despite the slight drop, Gatot said that BNI’s NIM remained above the national banking industry’s average of 5.4 percent.
In addition to increases in its interest and fee-based income, BNI also enjoyed a recovery of bad debts amounting to Rp 2.27 trillion in 2012, an increase year-on-year of around 4 percent from Rp 2.18 trillion, according to chief business risk officer Suwignyo Budiman. Amid the growing amount of disbursed credit, the bank is expected to depress its non-performing loans this year to a range between 2.5 and 2.75 percent from 2.8 percent in 2012.
Following the financial performance announcement, shares in BNI (BBNI) rose by 5 percent to close at Rp 4,600 apiece on Thursday compared to the day before.
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