NISP reports 121% jump in net profit<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Medium-sized bank NISP announced on Wednesday a 121 percent
\nsurge in first semester net profit on the back of strong net
\ninterest income in an industry where major banks have largely
\nbeen unable to restore their lending operations since the late
\n1990s financial crisis.<\/p>\n
NISP president Pramukti Surjaudaja said on Thursday the
\npublicly-listed bank's unaudited net profit for the first six
\nmonths of this year was Rp 70.6 billion (about US$8.2 million)
\ncompared to Rp 32 billion in the same period last year.<\/p>\n
He attributed the higher profit to strong net interest
\nrevenue, which jumped by 92 percent in the first half ending June
\n30 to Rp 195.5 billion from Rp 101.5 billion previously.<\/p>\n
\"The increase in interest income was in line with the bank's
\n(strong) lending activities,\" Pramukti was quoted by Antara as
\nsaying, adding that new lending during the period increased to Rp
\n7.17 trillion from Rp 4.42 trillion in the previous period.<\/p>\n
He also explained that some 64.4 percent of the new loans were
\nchanneled to corporations as working capital, 19.6 percent in the
\nform of consumer loans, and the remaining 16 percent to finance
\ninvestment activities.<\/p>\n
The publicly-listed NISP, which was relatively unscathed by
\nthe late 1990s banking crisis, has been active in lending to the
\nretail sector and to small and medium enterprises (SMEs).<\/p>\n
This is in contrast to the situation faced by the country's
\nmajor banks, which despite already having been rescued by the
\ngovernment through the use of huge amounts of public money, have
\nstill been unable to restore their lending businesses, thus
\nlimiting their sources of revenue to income from government
\nrecapitalization bonds and other fixed-income sources. Recently,
\nthe central bank has been putting pressure on these banks to
\nboost their lending following the sharp cut in Bank Indonesia's
\nbenchmark interest rate.<\/p>\n
Most major banks have been unable to quickly resort to retail
\nlending or financing SMEs due to both a lack of infrastructure
\nand expertise.<\/p>\n
The publicly-listed Bank BNI, which is among the top five
\nbanks in the country, had earlier reported only a slight increase
\nin first half net profit to Rp 1.55 trillion from Rp 1.51
\ntrillion previously.<\/p>\n
Elsewhere, Pramukti said that NISP would continue to focus on
\nlending to SMEs and the retail sector as the corporate sector was
\nstill considered risky.<\/p>\n
During the first semester, the bank also managed to reduce its
\nnon-performing loans (NPLs) to 1.2 percent from 2.16 percent,
\nwhile its capital adequacy ratio (CAR) stood at a healthy 17.05
\npercent.<\/p>\n
Pramukti said that the bank had cut its interest rate on loans
\nto 16.5 percent from the previous 17 percent.<\/p>\n
He also said that full-year net profit was expected to
\nincrease by between 30 percent and 40 percent.<\/p>\n
Meanwhile, Pramukti said that Bank of the Philippine Islands
\n(BPI) was unlikely to pursue its plan to buy a 20 percent stake
\nin NISP after talks between BPI and NISP shareholders stalled.<\/p>\n
\"They couldn't reach agreement on prices and other items,\" he
\nwas quoted by Dow Jones as saying.<\/p>\n
BPI, the Philippines' second largest bank in terms of assets,
\nconfirmed in March it was in negotiations to buy a stake in NISP.<\/p>\n
The three shareholders that want to sell their stakes in NISP
\nare Moore Investment Ltd., which holds a 4.12 percent stake,
\nHurst Investment Ltd., which holds a 7.8 percent stake, and
\nStiles Investment Ltd., which has a 7.8 percent stake.<\/p>\n
Pramukti added that a number of investors from Southeast Asia
\nand Europe were currently also looking to buy these stakes. He
\nrefused to name them.<\/p>\n
NISP shares were unchanged at Rp 220 on Thursday amid an
\noverall weak market sentiment.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/nisp-reports-121-jump-in-net-profit-1447893297",
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"sponsor": "Okusi Associates",
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