BNI Q3 profit almost doubles on consumer loans
BNI Q3 profit almost doubles on consumer loans
PT Bank Negara Indonesia (BNI), the nation's third-biggest
lender, almost doubled its profit in the third-quarter as a drop
in interest rates reduced funding costs and spurred consumers to
borrow more to buy homes and cars.
Net income rose to Rp 1.26 trillion (US$138 million) in the
three months ended Sept. 30, from Rp 645 billion a year earlier.
The profit was derived by subtracting first-half earnings from
nine-month results published by the bank on Wednesday.
Jakarta-based BNI and other Indonesian lenders are expanding
loans to consumers, whose spending makes up 70 percent of the
$208 billion economy, after interest rates in May fell to their
lowest level in six years. Rates are set to rise as inflation
accelerates, curbing demand for loans.
"Indonesian banks are performing well, mainly because of the
strong growth in loans to consumers and small businesses," said
Kelvin Miranda, who helps manage the equivalent of $180 million
at Asian Asset Management Sdn. in Malaysia. "Loan growth may slow
because interest rates may start rising."
The central bank said on Sept. 24 it may raise rates this year
to slow inflation and stabilize the rupiah. Inflation is forecast
by the bank to average 7 percent for 2004.
Miranda, who said he has sold his stakes in Indonesian banks,
is considering investing again once it becomes clear what
policies will be followed by the week-old government of President
Susilo Bambang Yudhoyono.
Net interest income at BNI, or revenue from borrowers after
deducting interest paid to depositors, rose 27 percent to Rp 1.73
trillion in the quarter, helped by a 39 percent drop in interest
costs.
BNI's earnings last year were crimped by losses stemming from
a fraud case that involved Rp 1.7 trillion of loans to fund
commodity shipments to Africa. The lender's 2003 profit fell 67
percent to Rp 829 billion after it set aside money to cover those
losses. BNI and police last year disclosed an investigation into
the case.
For the nine months to Sept. 30, BNI's net income rose to Rp
2.32 trillion, or Rp 175 rupiah, from Rp 1.05 trillion, or Rp 47
rupiah, a year earlier. -- Bloomberg