BII expects 20% rise in pretax profit

JAKARTA (JP): Publicly-listed Bank Internasional Indonesia (BII) forecasted yesterday that it will book no less than a 20 percent increase in pre-tax profit this year from last year's level of Rp 269.87 billion (US$114.74 million).

The bank's president, Edward H. Hadidjaja, said at a public presentation yesterday that BII expects to generate more profit from corporate, retail and consumer businesses as well as from fee-based services.

"Our growth strategy is aiming to increase fee-based income, improve funding mixture, diversify sources of revenue through regional branches and expand our consumer and retail businesses," he noted.

The bank expects that its total deposits will grow faster than 22 percent this year from last December's level of Rp 8.46 trillion, Edward said.

The bank's loan growth this year, he continued, is expected to be in the range of 17 percent to 20 percent, at the level being suggested by the monetary authority. As of last December, the bank granted a total of Rp 8.35 trillion in loans.

In addition to consumer and retail businesses, Edward said, the bank is also intensifying its corporate businesses, especially to serve companies working in the agro-business and infrastructure industries as well as export-oriented firms.

All the projections, Edward continued, are based on the bank's assumption that domestic rates will remain flat this year, the depreciation of the rupiah will be relatively faster than last year, competition will remain tight, and commercial banks will continue to face pressures on margins.

Edward also foresaw that the monetary authority is likely to further increase the minimum reserve requirements for commercial banks from the current level of 3 percent and introduce a stricter definition on such reserve requirements.

The authority may also tighten further offshore borrowing and impose sectorial exposure limitations on commercial banks, Edward added. (rid)