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BNI reports 19 percent increase in net profits
Big laugh: State lender BNIâs president director, Gatot M
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Big laugh:: State lender BNIâs president director, Gatot M. Suwondo (right), accompanied by the directors, laughs as he explains the lenderâs performance in Jakarta on Thursday. BNI booked Rp 10.8 trillion in net profits in 2014, a 19.1 percent increase from the profits it posted in 2013. (Antara/Prasetyo Utomo) (right), accompanied by the directors, laughs as he explains the lenderâs performance in Jakarta on Thursday. BNI booked Rp 10.8 trillion in net profits in 2014, a 19.1 percent increase from the profits it posted in 2013. (Antara/Prasetyo Utomo)
Big laugh: State lender BNI's president director, Gatot M. Suwondo (right), accompanied by the directors, laughs as he explains the lender's performance in Jakarta on Thursday. BNI booked Rp 10.8 trillion in net profits in 2014, a 19.1 percent increase from the profits it posted in 2013. (Antara/Prasetyo Utomo)
State-owned lender Bank Negara Indonesia (BNI) has reported a sharp increase in its net profits despite a decline in its lending growth last year attributed to the weakening of the local and global economy.
The bank's 2014 financial report showed net profits stood at Rp 10.8 trillion, a 19.1 percent increase from Rp 9.1 trillion in 2013.
The bank posted 10.8 percent growth in loans to Rp 277.6 trillion last year, from Rp 250.6 trillion in 2013, BNI president director Gatot M. Soewondo said.
The corporate as well as small and medium enterprise (SME) segments accounted for 70 percent of the total loans. The corporate and SME loans went to eight sectors prioritized by the bank, such as oil and gas, food, retail and trade, electricity and construction.
Meanwhile, 20 percent of its loans went to consumer and retail, dominated by first-house mortgages as well as personal loans. Loans in overseas branches accounted for 3.6 percent, while 5.4 percent went to its subsidiaries, BNI Syariah and BNI Multifinance.
The bank posted 1.96 percent in gross non-performing loans (NPL) last year, a decline from 2.17 percent in 2013.
The bank's total assets stood at Rp 416.6 trillion last year, rising by 7.7 percent from Rp 386.7 trillion in 2013.
BNI finance director Yap Tjay Soen said the bank was able to post higher growth in net profits despite lower lending growth due to a 17.4 percent increase in net interest income to Rp 22.4 trillion last year from Rp 19.1 trillion in 2013.
'We have seen a positive result in portfolio-mix and an increase in our asset yield. We have also posted positive growth in non-interest income,' Yap said.
The bank's non-interest income was recorded at Rp 10.7 trillion last year, 13.5 percent higher compared to Rp 9.4 trillion in 2013. Its net interest margin (NIM) also increased to 6.2 percent in 2014 from 6.1 percent in the previous year.
Gatot said the bank had seen tough times, which also affected the general business world, due to the change of government as well as increases in Bank Indonesia's rates and inflation.
According to Gatot, the bank had been able to book a solid performance in 2014 despite various economic challenges, saying that 'we expect that our net profit growth will remain within a range of 19 percent-20 percent this year.'
However, Gatot said the bank's lending this year would be maintained at sustainable growth within a range of 14 percent-16 percent as it was more conservative on the prospects for Indonesia's economy than the government.
'We predict that economic growth will be around 5 percent-5.5 percent this year, lower than the 5.7 percent mentioned in the revised state budget,' he said.
Gatot said the bank was interested in financing more infrastructure projects, especially in the eastern part of Indonesia. Loans for infrastructure projects will also relate to the maritime sector, which has been researched by the bank.
'Based on our research, the maritime sector can be developed in three main categories; infrastructure, fisheries and tourism,' he said.
Last year, BNI booked Rp 313.9 trillion in third-party funding, an increase of 7.5 percent from Rp 291.9 trillion in 2013. As much as 65 percent of the total third-party funding came from current accounts and savings accounts (CASA).
'The growth in CASA was related to our increased network, especially electronic channels. During 2014, BNI added 2,908 automated teller machines [ATMs] to 14,071 ATMs as well as 73 new branches to a total of 1,760,' he said.
Gatot said the bank expected to grow its third-party funding by between 13 and 16 percent with a focus on CASA.
The slower growth in third-party funding compared to its loans resulted in an increase in the loan-to-deposit ratio (LDR) to 87.8 percent last year from 85.3 percent.
