BRI enjoys profit in H1

BRI enjoys profit in H1

JAKARTA (JP): State Bank Rakyat Indonesia (BRI) said on
Tuesday that it had enjoyed an operating profit of Rp 856 billion
(US$97 million) in the first six months of this year, compared to
Rp 519 billion in losses in the same period last year.

BRI president Rudjito said at a media conference that the
first-half profit mainly resulted from an increase in interest
income to Rp 5.2 trillion from Rp 3.5 trillion.

He said that 61.3 percent of the interest income was generated
by the bank's lending business.

"BRI has channeled some Rp 30.5 trillion in credit in the
first semester, or an increase of 29.6 percent compared to the
same period last year," Rudjito said.

He added that the bank's loan to deposit ratio in the first
half reached 56.5 percent.

Indonesia's banking sector was badly hit by the financial
crisis that struck the country in the middle of 1997. While some
banks have recently started to announce a profit, most profit has
come from interest revenue on government bonds. Many of the
existing major banks have been injected by government bonds to
help them stay afloat.

Rudjito said that lending to small and medium-sized
enterprises (SMEs) and the retail sector in the first semester
totaled Rp 3.6 trillion, or 80.6 percent of the bank's total
lending portfolio.

The government, under pressure from the IMF, is determined to
restructure BRI's operation by focusing the bank on micro-lending
activity.

In the past, the bank had been active in channeling large
loans to the corporate sector.

Asked about BRI's initial public offering (IPO) plan, Rudjito
said that the bank was ready if the government decided to divest
its shares.

"The problem is whether the market can absorb it or not. We
are ready if the IPO plan is accelerated as long as the market is
conducive," he said.

The government has also promised international donors to
privatize state banks in a bid to restructure the ailing banking
industry.(11)