BRI posts 8 percent drop in profit

State-run Bank Rakyat Indonesia (BRI), the nation's fourth largest bank, announced that net profit dropped by 8 percent in the first nine months of the year, following a decline in its proceeds from recapitalization bonds.

The bank said in a press statement that profit declined to Rp 2.51 trillion (US$250.50 million) from Rp 2.73 trillion in the same period last year, despite an 11 percent increase in its net interest income to Rp 9.29 trillion.

Net income is derived from a reduction in interest revenue from borrowers with interest paid to depositors.

In this year's first nine months, BRI has provided some Rp 14.35 trillion in new loans with outstanding loans amounting Rp 72.73 trillion. The amount is higher than Rp 58.38 trillion as of the third quarter last year.

Of the total outstanding loans, some Rp 63.35 trillion were given to small and medium businesses.

As of the third quarter of this year, the bank's gross non- performing loans (NPL) stood at 5.13 percent, down from 5.75 percent in the corresponding period last year.

Due to its limited exposure to risky corporate lending businesses, BRI's NPL is relatively lower compared to other banks, which hover at above 5.5 percent following a new provision regulation set out by the central bank. -- JP