State-owned listed lender PT Bank Negara Indonesia (BNI) says it booked Rp 2.07 trillion (US$213.31 million) in net profits in the first quarter of the year, up 34.3 percent from Rp 1.54 trillion in the same period last year.

Meanwhile, overall operational income was up by 25.7 percent, which was the result of 'performance improvement, especially in efficiency, credit quality and increasing fee based income', BNI president director Gatot M. Suwondo said on Friday.

BNI's net interest income rose by 22.7 percent to Rp 4.29 trillion in the first quarter of the year compared to Rp 3.5 trillion year-on-year. The increase was backed by credit disbursements of Rp 200.5 trillion in the first quarter, up 21.7 percent from Rp 164.81 trillion in the same period last year.

The company reported that its largest increase in lending was in the corporate segment, which booked 43.5 percent growth in the first quarter year-on-year, while credits to the corporate sector contributed 41 percent to the company's total lending.

In non-interest income, the lender reported a 31.8 percent increase to Rp 2.24 trillion during the January-to-March period, up from Rp 1.7 trillion year-on-year.

Gatot also said that BNI's cost of funds declined by 90 basis points to 2.3 percent as of the end of March, compared to 3.2 percent at the end of March 2012. The declining cost of funds and a lower non-performing-loan ratio resulted in a 10 basis point increase in BNI's net interest margin to 6.1 percent as of the end of March year-on-year.

Gatot said that the bank expected to maintain its net interest margin between a range of 5.5 to 6 percent by the year end.

The company said that it expected that lending would grow faster in subsequent quarters and that growth would top 23 to 25 percent by the end of the year.

Gatot said that the bank would maintain its focus on disbursing loans to eight business sectors, comprising trade, agriculture, engineering and construction, oil and gas, electricity, food and beverage, chemicals and telecommunications.

The eight sectors comprise about 67 percent of the bank's credit portfolio. 'The focus on the eight sectors is a five year plan. We will probably evaluate and change them in early 2015,' Gatot said.

Despite its target for significant credit growth this year, BNI said it expected to maintain its non-
performing-loans ratio between 2.5 and 2.75 percent by the year end.

Loans to medium segments, which contribute about 11.6 percent to the bank's total lending, were down by around 16 percent to Rp 23.19 trillion.

Gatot attributed the decline to medium-sized clients who have since grown.

Shares in BNI (BBNI) rose by 1.9 percent to Rp 5,350 by closing time on Friday.

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