BRI first-half profit rises 47 percent

BRI first-half profit rises 47 percent

Bloomberg, Jakarta

PT Bank Rakyat Indonesia (BRI), the nation's fourth-largest
lender, said first-half profit rose 47 percent as lending
expanded and interest margins improved. The bank said it's
interested in bidding for smaller rival PT Bank Permata together
with a state pension fund.

Profit in the six months ended June 30 rose to Rp 1.72
trillion (US$185 million), or Rp 146.28 a share, from Rp 1.17
trillion, or Rp 118.2 a share, a year earlier, President-Director
Rudjito said in Jakarta. He didn't immediately provide per-share
earnings.

Net interest income, or interest revenue from borrowers
after interest was paid to depositors, rose 46 percent to 5.32
trillion rupiah from Rp 3.64 trillion a year earlier, he said.

BRI and other Indonesian lenders are benefiting as
interest rates at six-year lows propel loan growth. Cheaper loans
are helping to spur the construction of homes and shopping malls
and fuel consumer spending, which already accounts for more than
two-thirds of the $208 billion economy.

Shares of Bank Rakyat, which have risen 38 percent this
year, fell Rp 50, or 3 percent, to Rp 1,600 on the Jakarta
Stock Exchange. The earnings were released after the market
close.

BRI's net interest margin, measuring the difference
between what it charged for loans and paid for funds, rose to
11.69 percentage points from 8.86 percentage points a year
earlier. Deposit rates have fallen faster than lending rates,
helping make loans more profitable.

The average rupiah lending rate at Indonesian banks was
15.85 percent in the past six months, compared with 19.03 percent
a year earlier, central bank data showed. The average six-month
deposit rate was 6.13 percent in the first six months this year
compared with 11.31 percent a year earlier.

BRI, a state-controlled lender with 3,931 branches
across Indonesia, extended Rp 7.4 trillion in new loans for
the period, putting it on target for full-year loans of Rp 11
trillion, its financial statement said. The bank made Rp 8.22
trillion of new loans last year.

"We will stick to that plan of lending Rp 11 trillion this
year," Rudjito said.

It has outstanding loans of Rp 54.9 trillion. As of the
end of June, the bank had assets of Rp 99.28 trillion, the
statement said.

Most of BRI loans are to small-and medium-sized businesses.

BRI is interested in bidding for PT Bank Permata
jointly with the state pension fund, Jamsostek, and is awaiting
the fund's response to the proposal, Rudjito said at a press
conference in Jakarta after announcing the results.

The government has set Aug. 27 as the deadline for
potential investors to express interest in bidding for a 51
percent stake in Permata worth $394 million.