T

he country’s two largest banks, Bank Mandiri and Bank Central Asia (BCA), reported a strong growth in their net incomes in the first semester of this year on the back of a sharp increase in their lending.

State-owned Bank Mandiri said Thursday the growth of state-run Bank Mandiri, Indonesia’s largest bank by assets, reached 26.9 percent as of June, with an outstanding loan topping Rp 276.71 trillion (US$32.65 billion) compared with Rp 218 trillion last year, according to the bank’s data.

“Such growth is higher than the industry and is mainly due to high-yielded loans, such as micro credit, credit cards, etc. That supported a better performance of Bank Mandiri’s net profit, which grew more than 56 percent,” president director Zulkifli Zaini told a press briefing on Thursday.

Mandiri booked Rp 6.3 trillion in consolidated net profits in the first six months of this year, up 56
percent from Rp 4 trillion a year earlier on the back of soaring fee-based, net interest and net premium incomes.

Fee-based income soared 68.6 percent to Rp 6.18 trillion while net interest and premium income grew 32.4 percent to Rp 12 trillion supported by Mandiri’s subsidiaries, such as securities Mandiri Sekuritas, insurance AXA Mandiri and sharia Bank Syariah Mandiri. The net-interest income of the lender alone increased slightly by 14.6 percent to Rp 10.38 trillion.

Indonesia’s economy is poised for at least 6.5 percent economic growth this year, which economists say will mean increasing business activities in Southeast Asia’s largest economy and in turn boost bank lending.

Meanwhile, the nation’s largest private lender and the biggest bank by market capitalization in the Indonesia Stock Exchange (IDX), BCA, booked a 21.4 percent increase in its lending to Rp 159.7 trillion in June on the back of rapid disbursement for small and medium enterprises, commercial and consumer loans.

Small and medium enterprises and commercial loans increased 30.2 percent to Rp 65.7 trillion, while consumer loans were up by 27 percent to 39.9 trillion in June compared with the same period last year, “Mainly due to a high demand in housing and automotive loans”, BCA said in a press statement.

Housing loans increased 36.6 percent on a year-on-year basis to Rp 21 trillion while automotive outstanding loans were at Rp 14.5 trillion, a 23.6 percent increase.

“Low rates and a growing middle class in Indonesia in terms of the amount and the income have created stronger credit demand from individual customers,” the lender’s statement reads.

Earlier in February this year, BI increased its benchmark borrowing rates for the first time by a quarter of a percentage point after holding it at a record low 6.5 percent since 2009.

The increase in BCA’s lending boosted its net profit by 20.4 percent to Rp 4.8 trillion with a net-interest income and non-interest income of Rp 11.3 trillion, up 17.3 percent from a year earlier.

BI’s latest data shows that as of May this year, the loan growth of the nation’s commercial banks reached 23.4 percent to Rp 1,889.45 trillion with net profits growth of 21.42 percent to Rp 29.54 trillion during the period.

Shares of Mandiri and BCA were traded lower in Thursday’s trading in line with the benchmark Jakarta Composite Index’s (JCI) 0.68 percent slump to 4,145.83.