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)

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