BII expects to book 27% lending growth

JAKARTA (JP): Bank Internasional Indonesia of the Sinar Mas Group expects to book a Rp 300 billion (US$127 million) net profit this year, supported by an estimated 27 percent lending growth, an executive of the bank, H.S. Anwar, said yesterday.

Anwar also confirmed that Bank Internasional Indonesia (BII) will set up a joint venture with the Commonwealth Bank of Australia this year, each of which will hold an equal stake, with a planned capital of Rp 150 billion.

BII's president Indra Widjaja told the bank's shareholders yesterday that as of the end of 1995, BII's net loans stood at Rp 8.2 trillion, indicating a 20 percent increase over the previous year, while total deposits rose 37 percent to Rp 8.4 trillion.

"Last year's lending growth rate was much lower than the 45 percent growth in 1994. The decline, however, was justified by the need to curb credit growth as called for by the central bank, Bank Indonesia," Widjaja said.

"The aggregate credit growth nationwide in 1995 was approximately 23 percent, therefore our 20 percent growth was not entirely off the mark," he added.

Widjaja said that in 1995 the bank allocated up to 35 percent of its lendings to the services sector, 22 percent to the manufacturing sector, 17 percent to the trade sector, 12 percent to the construction sector, 3 percent to the agricultural sector and the remaining 11 percent to other sectors such as mining, forestry and agroindustry.

Commenting on earnings performance, Widjaja said that lending activities remained the primary source of revenue, contributing approximately 90 percent to the bank's total revenue.

He said that net interest revenue last year increased by 38 percent to Rp 493 billion over the previous year, while fee-based revenue rose 98 percent to Rp 168 billion.

He said that BII's net profit rose 38 percent to Rp 192 billion last year despite the 71 percent increase in operating expenses.

For the first quarter of this year, BII booked a net profit of Rp 71 billion, as compared to Rp 63 billion in the same period of last year. Its interest revenue rose from Rp 336 billion in the first quarter of last year to Rp 475 billion in the January to March period of this year.

Anwar also said that the shareholders yesterday approved several proposals, including the distribution of final dividends of Rp 60 per share, stock dividends and bonus shares.

He said the bank will issue eight new shares for every 10 old shares and one dividend share for every nine old shares.

Meanwhile, BII's holding company, PT Sinar Mas Multiartha, announced yesterday that it has shareholders' approval for the distribution of final dividends of Rp 56 per share and bonus shares.

Multiartha said it will distribute three new shares for every 10 old shares by capitalizing the capital gains accrued from its initial public offering last year.

Multiartha's net profit reached Rp 142 billion last year, much higher than 1994's figure of Rp only Rp 20 billion.

Its net earning per share rose by 85 percent from Rp 160 in 1994 to Rp 296 last year. (alo)