BNI projects 15% growth in profit for this year

The Jakarta Post, Jakarta

After recovering from a major lending fraud, and then tripling its net profit, publicly listed Bank Negara Indonesia (BNI) has projected a modest growth in its pre-tax profit of 15 percent for this year.

"Apart from projecting an increase of 25 percent in loan disbursements, we also project 15 percent growth in our net profits," BNI president director Sigit Pramono said on Wednesday.

The state bank plans to increase its loan disbursements to Rp 71 trillion (US$7.6 billion) from Rp 57.9 trillion last year.

"We will try to increase our consumer lending to 25 percent of our total loans and reduce our corporate loans," he said.

From total lending last year, which rose 24.7 percent compared to 2003, consumer loans grew from 12.9 percent to 18 percent, but on the other side corporate loans declined from 39.2 percent to 35 percent.

BNI, Indonesia's second largest bank in terms of assets, booked a net profit of Rp 3.14 trillion, an increase of 378 percent from the Rp 829 billion figure in 2003.

In 2003, the bank's net profit fell after it was hit by a high-profile fraud.

The prime suspect in the fraud, Maria Pauline Lumowa, remains at large. Authorities have named 19 suspects in the case, which centered on the unlawful disbursement of some Rp 1.7 trillion of export credits by BNI's Kebayoran Baru branch to PT Petindo and Gramarindo Group.

Two key suspects -- Edi Santoso, a former customer service head at BNI's Kebayoran Baru branch, and director of PT Petindo Perkasa John Hamenda -- were sentenced to life imprisonment and 20 years in jail respectively for their involvement in the scam.

Meanwhile, another key suspect, Adrian Waworuntu, is currently on trial. Prosecutors have demanded that he be sentenced to life imprisonment and fined Rp 1 billion, plus made to make restitution payments of Rp 6.8 billion. The verdict will be delivered on March 30.

BNI vice president director Arwin Rasyid said, "We cannot project similar growth this year because last year's 300 percent growth was in comparison to year 2003, where we had the letter of credit case in the Kebayoran Baru branch."

Last year, BNI undertook several corporate initiatives that had speeded its recovery. The bank recorded an increase in its total assets from Rp 131.5 trillion in 2003 to Rp 136.5 trillion in 2004.

BNI also reported that its net interest revenue -- interest earned from borrowers after being deducted by that paid to depositors -- in 2004 reached Rp 6.88 trillion, or up 37.6 percent from the Rp 5 trillion a year earlier.

Last year, BNI recorded a lower capital adequacy ratio (CAR) of 17.3 percent from 18 percent in 2003, and a lower non- performing loan (NPL) ratio of 4.6 percent from 5.69 percent in 2003. The bank's loan to deposit ratio stood at 55.1 percent.

Sigit said the decrease in the bank's CAR was partly due to funds that had to be set aside for reorganization to minimize the incidence of fraud and scams.

In a bid to maintain its CAR at a healthy 15 percent, the bank was also awaiting approval from the central bank to issue up to US$300 million in subordinated bonds this year.

BNI was also waiting for the implementation of its plan to acquire state-owned Bank Tabungan Negara before it conducted a secondary public offering, Sigit said. (003)