BII performs well, upbeat about becoming anchor bank

The Jakarta Post, Jakarta

As its financial indicators continue to steadily improve, Bank Internasional Indonesia (BII) is optimistic that it can become one of the "anchor banks" and play an even bigger role in the sector's consolidation process.

BII's president director Henry Ho said on Thursday that BII was performing well and that it had met the criteria set out by the central bank to be an anchor bank -- which will act as the main consolidating banks under its Indonesian Banking Architecture (API) scheme.

"Judging from our first-half financial reports, we surely fit the set criteria to become an anchor bank," Ho said.

BI launched the API in 2004 in order to further consolidate and streamline the country's 132 domestic banks. Under the API, BI expects there will only be five international banks and 10 national banks.

With mergers and acquisitions likely to mushroom in the next few years, the central bank has also announced its criteria for the anchor banks.

Ho said BII had met all the criteria.

For example, the nation's sixth largest lender posted in the first six months of the year a capital adequacy ratio (CAR) of 20.9 percent and a 55 percent rise in lending as compared to the same period in 2004, far exceeding BI's criteria of 12 percent and 22 percent respectively, Ho said.

The CAR is a comparison between a bank's capital with its risk-weighted assets, including loans.

The bank's first semester report showed that total loans stood at Rp 19 trillion as of June, with Rp 12 trillion loans booked in the corresponding period last year.

BII financial director Prem Kumar said that the high growth in lending was in part attributable to the bank's move to acquire PT Wahana Ottomitra Multiartha, or WOM Finance -- a leading multi- finance company focusing on motorcycles.

"BII has completed the acquisition of 43 percent of WOM Finance in May 2005," he said.

The financing company recorded a Rp 130 billion increase in revenue as of June from the same period in 2004.

In another part of BII's first-half financial reports, it is stated that the bank had issued 608,517 units of credit cards, putting the bank in fourth place at 6.5 percent market share after Citibank, BNI and HSBC. (006)

Anchor Bank Criteria ------------------------------------ Criteria BI BII ------------------------------------ CAR Loan Growth Net NPL* < 5% 2,06% LDR** ROA*** ------------------------------------- Source: BII

* Non-performing loans ** Loan to deposits ratio *** Return on assets