BNI's Q3 profit down 24 percent

BNI's Q3 profit down 24 percent

The Jakarta Post, Jakarta

Bank Negara Indonesia (BNI) reported a 24 percent drop in its
unaudited net profit during the first nine months ending Sept.
30, as its costs spiraled upward along with a recent rise in
inflation and interest rates.

The bank posted a net profit of only Rp 1.76 trillion (US$176
million) in the third quarter, as compared to Rp 2.32 trillion in
the same period last year.

"The decline in profit was the result of lower earnings, still
high reserve requirement fees, as well as rising operational
costs," it said in a statement released on Monday.

With the reduced profit, BNI joins several other major banks
in the country that also reported disappointing third-quarter
performances as a result of the recent surge in inflation and
interest rates.

Despite the unfavorable circumstances, however, BNI still
booked a higher interest income of Rp 5.38 trillion during the
period, as compared to Rp 5.12 trillion last year.

Its operating income also improved by 48 percent to Rp 1.30
trillion.

"This rise in income, however, has still failed to improve our
net interest margin, as the central bank's interest rates have
been rising as well, while we cannot yet raise our own credit
rates," the bank said.

BNI's outstanding loans, meanwhile, had continued to grow as
well, by 22 percent to Rp 63.19 trillion, on the back of strong
commercial loans to the corporate sector.

"We will continue our intermediation commitment by disbursing
loans selectively according to our prudent risk management
system," it said.

The bank's total deposits also rose slightly by 9 percent to
Rp 111.77 trillion, which along with the growing loans, increased
its capital adequacy ratio to 16.5 percent.

BNI's loan-to-deposit ratio, meanwhile, also improved to 56.54
percent from 40.49 percent.

BNI, the country's third-largest bank by assets, is 99 percent
owned by the government and 1 percent by the investing public.

The bank's shares on the Jakarta Stock Exchange ended 5.5
percent higher at Rp 1,330 on Monday.