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rivate lender QNB Bank Indonesia, part of the Qatar National Bank (QNB) Group, plans to grow its fee-based income and push for efficiency after it enjoyed higher-than-average loan growth in its business in the first six months of the year, its executive has said.

The bank had posted Rp 38.59 billion (US$2.86 million) in fee-related income as of June, a 9.16 percent increase from Rp 35.35 billion in the same month last year, its financial report showed.

The increase of fee-based income contributed to the bank'€™s total net profit worth Rp 29.6 billion in the first half, according to the report.

'€œWe will be more focused and seek more fee-based income as well as optimize our resources and increase cost efficiency,'€ QNB Indonesia director Azhar bin Abdul Wahab said on Friday, while declining to mention the target.

As part of efforts to draw more fee income, QNB Indonesia is in the process of providing a payment system service for rural banks (BPR) and channeling its loans through the lenders.

The process of being a payment system provider is part of the bank'€™s continuous investment in infrastructure and IT systems as it needs to be more efficient, Wahab said.

Wahab said the bank'€™s cost-to-income ratio (BOPO) as of June reached 95.78 percent, which was considered high amid the banking industry average, due to its high loan growth.

According to Wahab, the bank'€™s loans, which grew 22 percent year-to-date (ytd) to Rp 18.45 trillion as of June, were higher than the banking industry average amid the country'€™s weak economy.

'€œDespite a high credit growth, we always ensure that it is based on prudential principles and keep monitoring to avoid bad loans,'€ Wahab said.

As of June, QNB Indonesia saw its net non-performing loans (NPL) at 1.84 percent, rising from 0.24 percent in the same month last year, as the bank also saw challenges amid the domestic economic slowdown.

Currently, its loan portfolio is still dominated by corporate and commercial segments, which cover 94 percent of outstanding loans.

The bank posted an 11 percent increase in total assets to Rp 23.1 trillion as of June, while its third-party fund (DPK) grew by 17 percent ytd to Rp 16.2 trillion in the first half.

In order to be prudent, Wahab said the bank would monitor its capital adequacy ratio (CAR), which stood at 12.57 percent as of June, a long drop from 21.69 percent in the same month last year.

'€œOur shareholders are committed and we have done four rights issues previously in an effort to increase our capital. We will maintain our CAR [capital adequacy ratio] at a healthy level,'€ Wahab said.

However, Wahab declined to mention whether the bank had a plan to seek additional capital injection or conduct another rights issue this year.

According to its financial report, QNB Indonesia had Rp 2.09 trillion in core capital as of June, making it a BUKU II bank '€” a category of banks with core capital of Rp 1 trillion to Rp 5 trillion.

As of last year, the Doha-based QNB Group controlled 82.59 percent of the bank'€™s shares, while the remaining were owned by Sulawesi-based Bosowa Group and the public.

On Friday, the bank'€™s extraordinary shareholders meeting approved the appointment of Djoko Sarwono as a new independent commissioner and Windiarto Tabingin as independent director.