Bank Central Asia's 2004 Profit Rises 34% on Loans
PT Bank Central Asia, Indonesia's second-largest lender by assets, said profit rose 34 percent last year as an expanding economy spurred companies and individuals to borrow more.
Net income rose to Rp 3.2 trillion (US$341 million), or Rp 260 a share, from Rp 2.39 trillion, or Rp 197 a share a year earlier, the lender said in a statement.
Bank Central and other Indonesian banks are benefiting as interest rates at six-year lows propel loan growth. The decline in interest rates is helping spur the construction of homes and shopping malls and more consumer spending, which already accounts for more than two-thirds of the nation's $208 billion economy.
Southeast Asia's largest economy may expand 5.5 percent this year, the fastest pace in nine years, after 5.1 percent growth in 2004, according to the government.
Bank Central Asia, a unit of U.S. hedge fund Farallon Capital Management LLC, said net interest income, or interest revenue from borrowers after interest was paid to depositors, rose to Rp 6.59 trillion from Rp 5.34 trillion in 2003.
The lender made Rp 11.1 trillion in new loans last year, taking its outstanding loans to Rp 40.4 trillion, the statement said.
Bank Central Asia is also seeking to provide as much as Rp 6 trillion in financing for toll-road projects and power generation, President Director Djohan Emir Setijoso said at a news briefing on Tuesday.
"We will only provide financing for projects of less than seven years," he said. "We will not finance projects of more than 10 years."
The Indonesian government on Jan. 17 said it may need as much as $150 billion of investment in roads, power plants and other infrastructure projects to create more jobs and accelerate economic growth over the next five years. Indonesia will offer at least 91 projects worth about $22 billion this year, State Minister of National Development Planning Sri Mulyani Indrawati said in January.
Indonesia may sell remaining government stakes in Bank Central Asia and other lenders this year to raise funds to cover its budget deficit, Raden Pardede, vice-president director of Asset Management Company said Feb. 24. The government has a 5.02 percent stake in Bank Central Asia.
Bank Central Asia's share rose 78.9 percent in 2004, outpacing a 45 percent gain in the benchmark Jakarta Composite Index, according to data compiled by Bloomberg. The stock rose Rp 25, or 0.7 percent, to Rp 3,450 at the 4 p.m. close on the Jakarta Stock Exchange on Tuesday.