BNI sees net profit jump to Rp 3t next year

BNI sees net profit jump to Rp 3t next year

Rendi A. Witular, The Jakarta Post, Jakarta

Troubled state-owned Bank Negara Indonesia (BNI) projected a
net profit of around Rp 3 trillion (US$352 million) and a lending
growth of between 27 percent and 36 percent next year, despite a
tougher business environment, a senior official said.

The newly elected BNI president, Sigit Pramono, said the
higher lending volume should provide the bank with a higher
interest revenue.

"The general elections next year will overshadow business
activities, but we are optimistic that the bank's net profit
target of Rp 3 trillion could be met," said Sigit on Tuesday.

He explained that for the first semester of 2004, businessmen
would have a tendency to halt activities because of the general
elections, but in the second semester they would race to develop
their businesses and seek new bank loans.

BNI, the country's second largest bank in terms of assets,
previously said its 2003 net profit was estimated to reach Rp 1.6
trillion, down from Rp 2.51 trillion last year due to potential
losses from the high-profile Rp 1.7 trillion lending fraud.

The management has decided to set aside a huge loan-loss
provision of about Rp 1.3 trillion against potential losses from
the scandal.

The bank had initially targeted a Rp 3 trillion net profit
this year.

In regards loans, Sigit said: "Next year will be a tough year
for us. But we remain committed to allocate between Rp 12-16
trillion of lending next year, in order to boost our revenue from
loan interest."

BNI's outstanding loans this year are estimated to reach Rp 44
trillion.

Sigit said the expansion in lending was also aimed at reducing
the bank's dependency on revenue from the government's
recapitalization bonds.

Around 40 percent of BNI's revenue this year will come from
recap bonds, which totals Rp 46 trillion as of last year.

Sigit also said that between January and March, BNI management
would focus more on investigating the lending fraud, recovering
losses, and restoring public trust in the bank.

From April to June, the management plans to focus on
strengthening the internal supervision of the bank by launching a
"zero fraud operation" campaign and restoring the bank's net
profit.

Sigit said the management would try to realize a rebranding
measure in July to rebuild the bank's image after the revelation
of the massive lending fraud.

Included in the rebranding strategy was a possible change in
the bank's logo, he said.

BNI's logo depicts a traditional Indonesian sailing vessel.