BNI's first half net profit up

The Jakarta Post, Jakarta

State-owned Bank BNI announced on Wednesday that its unaudited net profit had slightly increased to Rp 1.55 trillion in the first half from Rp 1.51 trillion in the previous period.

The higher profit was attributed to a 14 percent increase in net interest income to Rp 2.22 trillion from Rp 1.94 trillion, the bank said in a statement.

The bank said that a 14 percent decline in interest costs offset a 6.6 percent fall in gross interest income.

Interest rates on time deposits and savings have been in a declining trend after the central bank aggressively cut its benchmark rate. But lending rates have declined at a much slower pace.

Several bankers had previously said that they have to keep lending rates high, despite calls for lower rates from Bank Indonesia, to compensate for a decline in interest revenue from government recapitalization bonds, whose interest rates are largely linked to the central bank rate. The government injected the bonds into troubled banks in the wake of the late 1990s financial crisis.

The price of BNI shares on the Jakarta Stock Exchange fell by 5.88 percent to Rp 160 from Rp 170 at Tuesday's closing amid overall weak market sentiment due to the weakening of the rupiah against the U.S. dollar.

Elsewhere, BNI said its capital adequacy ratio (CAR) declined to 15.3 percent as of June 30, from 18.2 percent in June last year, while its non-performing loans (NPLs) declined to 3.5 percent of total loans from 12.2 percent previously.

Bank Indonesia requires banks to have a minimum CAR level of 8 percent, and a maximum NPL ratio of 5 percent.