Islamic Bank profits up by nearly 70% : Report<\/p>\n
JAKARTA (JP): Bank Muamalat Indonesia, Indonesia's first
\nIslamic bank, reported a nearly 70 percent increase in its
\nprofits, to Rp 6.02 billion (US$2.8 million) last year from Rp
\n3.71 billion in 1993.<\/p>\n
The bank's president Zainulbahar Noor said yesterday that the
\nsubstantial increase in the bank's profits was largely due to the
\nsharp increase in its revenues from operations.<\/p>\n
\"The income from revenue-sharing businesses alone surged to Rp
\n27.80 billion last year from Rp 17.97 billion in 1993,\"
\nZainulbahar said in a hearing with the Banking, Insurance and
\nTrade Commission of the House of Representatives.<\/p>\n
The bank's problem loans, comprising of non-performing,
\ndoubtful and bad loans, amounted to 1.35 percent of its
\noutstanding loans of about Rp 190.29 billion last year, he said.<\/p>\n
\"The bad loans represented only 0.56 percent of outstanding
\ncredits,\" he said.<\/p>\n
Bank Muamalat Indonesia, which bases its operations on the
\nIslamic banking principles, provides no interest for its clients
\nbut instead offers them a profit sharing arrangement.<\/p>\n
However, Zainulbahar said the bank, being a unique bank, often
\nfaces difficulties in raising funds from the public as well as in
\nchanneling them as loans.<\/p>\n
The bank was established in May 1992 to serve Moslems who
\nconsider that taking or paying interest in banking transactions
\nprohibited.<\/p>\n
Zainulbahar said the bank, which at present has four branches,
\nwill continue to expand its operational network to improve its
\nmarket shares in Indonesia's banking industry.<\/p>\n
\"We also help the establishment of secondary Islamic banks to
\nsupport the bank's operations at district levels,\" he said,
\nadding that the increase in the number of secondary Islamic banks
\nwill make the transactions faster and more efficient.<\/p>\n
According to the unaudited 1994 financial statement, ended in
\nDecember, the bank's total assets as of last December reached Rp
\n245.82 billion ($113.95 million), an increase of nearly 50
\npercent form Rp 167.02 billion as of the end of 1993.<\/p>\n
The bank, which is majority owned by the public, recorded a
\ncapital adequacy ratio of 41.9 percent in December last year, far
\nabove Bank Indonesia's minimum requirement of eight percent, with
\nthe loan to deposit ratio amounting to 80.90 percent, lower than
\nthe minimum 110 percent requirement.<\/p>\n
In the same period, the bank's rate of return on asset was
\nrecorded at 2.44 percent and rate of return on equity at 5.78
\npercent, Zainulbahar said. (hen)<\/p>",
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