Bank NISP expands lending by 74 percent

JAKARTA (JP): While most banks remain hesitant about lending to a corporate sector groaning under mountains of debt, publicly listed Bank NISP expanded its lending 74 percent to Rp 2.3 trillion (US$277.1 million) in the first semester of this year.

Bank NISP president Pramukti Surjaudaja said here on Wednesday total loans outstanding as of June represented an even larger increase of 154 percent from the previous year.

"Such a massive expansion was made possible because our bank has from the outset focused on lending to small and medium-size enterprises (SMEs)," Pramukti said.

Although competition in lending to SMEs has become fiercer as most banks continue to shun the beleaguered corporate sector, Bank NISP possesses the advantage of long experience in serving SMEs, he said.

Pramukti said 80 percent of the lending was extended in working capital loans, 14 percent in investment credits and the remainder in consumer loans.

"SMEs in the trading and manufacturing sector remain our largest customer," Pramukti said.

The bank's audited report for the first semester showed its total assets at Rp 4.6 trillion and a capital adequacy ratio (capital against risk-weighted assets) of 13.51 percent. There also was a decrease in nonperforming loans to 6.8 percent from 32.3 percent a year earlier, according to the audited report.

According to Pramukti, the bank's total assets represented a 44 percent increase from a year earlier, and the percentage of its productive assets rose 46 percent to 90 percent.

The report said third-party deposits and savings at the bank increased 55 percent from the previous year, and 20 percent from December to a total of Rp 3.3 trillion.

The bank booked a before-tax profit of Rp 25.6 billion, up 43 percent from a year earlier, on net interest revenue of Rp 63.5 billion and noninterest revenue of Rp 34.5 billion.

The bank moved to increase its transparency recently with its shareholders approving the appointment of an American analyst, Eugene Keith Galbraith, as an independent commissioner.