Bank Bali expects 22% increase in net profits

Bank Bali expects 22% increase in net profits

JAKARTA (JP): The publicly-listed Bank Bali has predicted a
conservative 22 percent increase in net profits, from last year's
unaudited figure of Rp 91 billion (US$39.3 million), for this
calendar year.

The projected profit growth for this year is much lower than
the 30 percent rise in net profit for last year, bank executive
Firman Soetjahja, said.

"We prefer a conservative prediction because it will be very
difficult to generate a large income this year after the
government introduced tighter monetary policies for the industry
last year," he added.

Firman cited an example that a one-percentage-point increase
in reserve requirement set by the central bank, Bank Indonesia,
would mean a 0.50 percent increase in costs for Bank Bali.

Bank Indonesia has required all commercial banks to increase
their minimum reserves from 2 percent of their funds to 3
percent, beginning this month.

"And the higher costs will reduce our incomes by up to Rp 14
billion this year," Firman said.

He also said that Bank Bali will reduce its lending to the
property sector, which last year accounted for 23 percent of its
total credits.

Based on an unaudited report, the bank's total assets rose by
38 percent to Rp 6.5 trillion as of the end of last year; its
total credits were Rp 4.5 trillion.

Firman said that about 23 percent of the bank's total credits
were allocated to the property sector, 27 percent to the trading
sector, 28 percent to the manufacturing sector and the remaining
22 percent to other sectors.

He added that Bank Bali's credits to its own group's
businesses was less than one percent of its total credits
outstanding last year.

Most of Bank Bali's group companies operate in financial
services such as insurance, leasing, securities and multi-
finance.

Firman also said that Bank Bali will open two branch offices
in the towns of Pekanbaru, Riau, and Yogyakarta this year,
increasing the total number of branches to 131. (08)