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)