BII profit soars by 191.7 percent

The Jakarta Post, Jakarta

Publicly listed Bank Internasional Indonesia (BII) reported on Friday a 191.7 percent jump in first-half net profit from the same period last year.

The bank said that profit soared to Rp 425 billion (US$46.91 million) in the six-month period ending June 30.

BII, which is majority owned by South Korea's Kookmin Bank and Singapore's investment company Temasek, attributed the higher profit to the lower cost of funds and higher lending.

A number of listed banks have also reported higher revenue on lower cost of funds as a decrease in the central bank benchmark interest rate has reduced expenses for depositors, while keeping the lending rate for borrowers at a healthy level.

BII's gross lending grew by 52.2 percent to Rp 12.37 trillion in the first semester of this year from Rp 4.24 trillion in the same period last year.

Government recapitalization bonds dropped sharply from Rp 14.71 trillion to Rp 5.4 trillion. Thus, the bank's lending portion in total assets was up from 23.5 percent to 35.2 percent, the bank said.

The government injected bonds into ailing banks following the late 1990s financial crisis to help shore up their capital. The recipient banks receive interest from the bonds.

Third-party funds in the first semester was slightly up to Rp 28.71 trillion from Rp 27.57 trillion in the first six months of 2003, BII said.

It added that its capital adequacy ratio stood at 21.87 percent, well above the central bank's minimum requirement of 8 percent. Nonperforming loans were at 2.97 percent, well below the maximum limit of 5 percent.