BNI's first half net profit up

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.