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BII net profits surge 28%; caution lingers over NIM contraction
Looking good: PT Bank International Indonesia president director Taswin Zakaria (second left) talks with the bankâs board of directors Jenny Wiriyanto (left), Thilagavathy Nadason (second right) and Hedy Lapian (right) after presenting the bankâs 2013 financial performance in Jakarta on Wednesday
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Looking good: PT Bank International Indonesia president director Taswin Zakaria (second left) talks with the bankâs board of directors Jenny Wiriyanto (left), Thilagavathy Nadason (second right) and Hedy Lapian (right) after presenting the bankâs 2013 financial performance in Jakarta on Wednesday. (Antara Foto/Audy Alwi) (second left) talks with the bankâs board of directors Jenny Wiriyanto (left), Thilagavathy Nadason (second right) and Hedy Lapian (right) after presenting the bankâs 2013 financial performance in Jakarta on Wednesday. (Antara Foto/Audy Alwi)
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span class="inline inline-none">Looking good: PT Bank International Indonesia president director Taswin Zakaria (second left) talks with the bank's board of directors Jenny Wiriyanto (left), Thilagavathy Nadason (second right) and Hedy Lapian (right) after presenting the bank's 2013 financial performance in Jakarta on Wednesday. (Antara Foto/Audy Alwi)
Publicly listed Bank Internasional Indonesia (BII), part of Malaysia's Maybank, announced on Wednesday that robust fee-related activities had boosted its bottom line to reach Rp 1.54 trillion (US$130.75 million) in 2013.
The bank's latest financial report shows that net profits surged 28 percent year-on-year. BII finance director Thilagavathy Nadason attributed the growth to the bank's fee-based income, which increased at a faster growth rate than its net interest income.
By December 2013, the lender's net interest income climbed 9 percent to Rp 5.8 trillion and its fee-based income rose by 19 percent to Rp 2.29 trillion from a year ago.
Similar to other major lenders, BII also suffered from slower net interest income growth, resulting from higher costs of funds and squeezed net interest margin (NIM) ratio.
'We recorded an overall 20 bps [basis points] uptick in the costs of funds, especially after Bank Indonesia (BI) raised its benchmark interest rates in the fourth quarter. In the end, our NIM fell to 5.2 percent,' Nadason told reporters.
Back in 2012, BII saw its earnings skyrocket 81 percent, supported by a 5.73 percent NIM ratio and relatively lower costs of funds.
She said that pressures on the costs would remain in 2014 that would potentially contract the NIM figure even more.
Meanwhile, BII's financial report reveals that its outstanding loans reached Rp 102.03 trillion in 2013, 26 percent higher from 2012.
All of its lending segments ' consisting of business banking, retail banking and global banking ' posted double-digit growth and contributed almost equally to total loans.
In customer deposits, BII booked a 25 percent increase to Rp 107.24 trillion. The majority of the deposits were made up by time deposits with 60.5 percent, followed by savings with 23 percent and current account with 16.5 percent.
According to the financial report, BII's total assets amounted to Rp 140.71 trillion by 2013. Its loan-to-deposit ratio reached 93.2 percent, while its net non-performing loans ratio and capital adequacy ratio stood at 1.55 percent and 12.7 percent, respectively.
This year, BII has set both its loans and customer deposits growth targets at between 14 percent and 17 percent.
BII president director Taswin Zakaria said that BII ' which is currently listed as one of the country's 10 largest banks by assets ' would try to maintain the same loan composition this year. 'All of them still offer huge potentials,' he said.
He added that the lender had also laid out a new business plan, which he claimed would help BII book the target and assist the government with the realization of its Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI) projects.
'We have divided our business networks into several regions, all of which have their own specific regional qualities. For example, Bali and Nusa Tenggara are known for their tourism and food products. So we will try to focus the disbursement of loans to those sectors in those places,' he said.
On Wednesday, BII's shares ' sold under the 'BNII' code ' ended at Rp 304 apiece, unchanged from the previous day.
