TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
BNI to improve efficiency with building takeover
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
A heritage building, built in the Dutch colonial era and formerly the headquarters of De Javasche Bank, is pictured after being taken over as a Bank Negara Indonesia (BNI) branch office in Yogyakarta. The state-owned lender has announced plans to buy more buildings to reduce rental costs. (kompas.com/Adhika Pertiwi)
S
tate-owned lender Bank Negara Indonesia Tbk (BNI) plans to take over branch buildings it is currently leasing, as well as constructing new office buildings and increasing branchless banking agents to boost efficiency amid low interest rates.
BNI president director Achmad Baiquni said the efficiency measures were necessary as the government had pushed for lower interest rates, which led to cuts in the bank’s interest margins, forcing it to find other sources of income and to operate more economically.
"Our office costs are expensive. By taking over operational buildings, rent costs can be cut. For example, the BNI building was previously not our own. But we acquired it in mid-2015," he said in Jakarta on Tuesday.
The bank, he further said, wanted to push down operational costs, which in the first quarter of 2016 rose 16.3 percent, more than its interest income, which only grew 13.3 percent. Its average cost-to-income ratio (BOPO), which reflects the bank’s efficiency, was a burden at around 68 percent.
"We will cut the BOPO this year. But currently, we are still renting other places for office operations. We are going to break ground on a new building in Pejompongan and hopefully it will be operational in two years," he said.
Moreover, the company hope to triple its branchless banking agents from around 5,000 at present to 15,000.
Baiquni hailed the government’s efforts in lowering the interest rate, as long as the margin could be maintained. A lower interest rate could help the lender to reduce non-performing loans (NPL) amid the weakening economy.
"We already looked for cheaper funds and cut our interest rate. Now we are offering small enterprise loans, worth around Rp 5 billion per debtor, with an interest rate of below 10 percent," he said. (ags)
