BRI expects to exceed profit target
The Jakarta Post, Jakarta
Publicly listed Bank Rakyat Indonesia (BRI) expects its 2004 net profit to exceed its target of Rp 2.6 trillion (US$283.68 million), thanks to aggressive growth in lending and cheap funds amid declining interest rates.
BRI president director Rudjito said on Thursday the bank saw a possible rise of 36 percent in net profit to approximately Rp 3.4 trillion, from Rp 2.5 trillion last year.
"We booked Rp 1.72 trillion as of June. If we double that, we could surpass our target of Rp 2.6 trillion," Rudjito said on the sidelines of a seminar on leadership and corporate culture.
He said the hefty growth was mostly attributed to an increase in loans and cheap funds in the bank.
"The growth of loans is really great, and as projected. We planned to channel some Rp 11 trillion this year, and by June we still had Rp 5 trillion left. So if we disburse at least Rp 1 trillion per month, the target will virtually be met," Rudjito said.
As of the end of June, BRI recorded outstanding loans of Rp 54.9 trillion, with assets at Rp 99.28 trillion, making it the country's fourth largest bank in terms of assets.
The bank, which disburses loans largely to small and medium- sized enterprises (SMEs), disbursed Rp 8.22 trillion in loans last year.
"Our focus is still the SMEs and we expect to expand our reach in more urban areas. We hope the new government will have a clearer plan and vision for the real sector to encourage bank lending to those businesses," said Rudjito.
The new government must quickly address the issues of human capacity building, product quality building, and market and marketing building, he added.
Rudjito also said the bank's expected growth was helped by a larger portion of cheap funds, which currently account for 68 percent of the bank's total third-party funds.
"BRI has a lot of cheap funds, such as clearing accounts and savings. Currently, the portion of such funds is 68 percent, more than our target of 60 percent. The remainder is time deposits," he said.
The bank's shares closed at Rp 1,925 on Thursday on the Jakarta Stock Exchange, down Rp 25 from Wednesday's close of Rp 1,950.