Bank Niaga records 41.5% increase in pre-tax profit

Bank Niaga records 41.5% increase in pre-tax profit

JAKARTA (JP): Publicly listed Bank Niaga reported a 41.5 percent increase in its unaudited pre-tax profit in 1995 to Rp 80.6 billion (US$35.20 million) from Rp 56.9 billion in the previous year.

The head of the bank's corporate affairs, Jonki Kresnadi, said yesterday that the bank's consolidated earnings rose by 41.3 percent to Rp 91.4 billion in 1995 from Rp 64.7 billion in the previous year.

The bank's credits grew by 21.6 percent to Rp 4.5 trillion in 1995 from Rp 3.7 trillion in the previous year, he said, adding that the 1995 growth rate was lower than the 24.8 percent growth booked in 1994.

"The lower growth was in line with the tight money condition in the country," Jonki said, adding that the tight climate in the country's economy is likely to further slow down Bank Niaga's credit expansion this year.

He said that this year's earning growth, as a consequence, will likely stay at about last year's level of 41 percent.

The bank's loan to deposit ratio improved last year to 90.8 percent from 94.7 percent in 1994, with the capital adequacy ratio of 8.27 percent, slightly surpassing the central bank's standard of 8 percent.

Jonki expected that Bank Niaga's capital adequacy ratio position would reach 10.6 percent in the first semester of this year as a result of the conversion of the bank's convertible bonds into shares.

He said the monetary climate could even tighten further this year as the impact of the central bank's policy to raise the reserve requirement from 2 percent to 3 percent beginning next month.

"The micro impact of the rise in the reserve requirement will be the increase in the cost of money," he said. "In the macro level, the policy could significantly reduce the money supply," he added.

He said the rise in the cost of money and the tighter money supply would, therefore, further push up interest rates of time deposits, which at present reach 17 percent per annum. (hen)