BNI's net profit slumps by 5.9%
BNI's net profit slumps by 5.9%
JAKARTA (JP): State Bank Negara Indonesia (BNI) announced a
fall in net profits to Rp 315.23 billion (US$39.39 million)
yesterday, a 5.9 percent decline on profits of Rp 335.13 billion
made the previous year.
The bank said in a statement that the decline was attributable
to the sharp depreciation in the value of the rupiah against the
U.S. dollar.
"Our 1997 performance was significantly affected by the
depreciation in the rupiah. Our asset base and foreign exchange
income increased substantially, and our provisioning level was
increased in anticipation of a higher number of non-performing
loans," the statement said.
BNI, which is publicly listed, said yesterday that it had
increased its loan-loss provision by 336 percent to Rp 689.7
billion in 1997, up from Rp 157.8 billion in 1996, in
anticipation of a prolonged financial crisis.
"In anticipation of the decline in our asset quality due to a
prolonged financial crisis, BNI increased its provisioning
level," the statement said.
The bank said that nonperforming loans as a total of all loans
rose to 6.8 percent in 1997 from the 1996 figure of 6.1 percent.
"The increase was primarily due to the monetary crisis," the
statement said.
The monetary crisis has cut 70 percent from the value of the
rupiah against the American dollar. The rupiah is currently
trading at around Rp 8,000 to the dollar, compared to a pre-
crisis level of Rp 2,450 in July last year.
The bank, however, said that total interest income rose 46
percent to Rp 1.43 trillion in 1997, up from Rp 966.43 billion
in 1996, as a result of an expansion of credit in response to the
decline in the value of the rupiah.
The bank's operating income before provisioning increased by
89.4 percent to Rp 1.16 trillion in 1997, up from Rp 614 billion
in 1996, the statement said.
The statement also said that other operating income rose to Rp
956 billion in 1997 from Rp 492 billion in 1996 due to an
increase in foreign exchange gains.
However, bank operating expenses surged drastically, rising by
42.9 percent to Rp 1.20 trillion in 1997 from Rp 845 billion the
previous year. The increase was due to the weak national
currency, and the rising cost of human resources and investments
required to maintain a program to automate the bank's retail
outlets.
The bank's assets rose by 63 percent to Rp 57.17 trillion in
1997 from Rp 34.88 billion in 1996 as a result of the bank's
gross loan expansion.
"Gross loans rose by 74 percent to Rp 40.73 billion in 1997
from Rp 23.40 billion in 1996," the bank said.
The bank collected total deposits worth Rp 29.30 billion in
1997 compared to Rp 19.09 billion in 1996, and its equity
increased by 12.3 percent to Rp 3.17 trillion last year, up from
Rp 2.83 trillion in the previous year.
However, the bank's capital adequacy ratio (CAR) fell to 8.31
percent in 1997 from 11.82 percent in 1996 due to the weak
rupiah.
"The sharp depreciation in the rupiah brought our capital
asset ration down because some of our assets are held in foreign
currency while our equity is held in rupiah,' the statement said.
The bank's interest margin fell to 2.75 percent in 1997, down
from 3.03 percent in 1996, due to an increase in deposit rates in
the second half of the year. (aly)