BRI targets 25% increase in lending

The Jakarta Post, Jakarta

Bank Rakyat Indonesia (BRI) is hoping to extend Rp 15 trillion (US$1.64 billion) in new loans this year, a 25 percent increase from Rp 12 trillion in new loans extended in 2004.

"We expect to channel about 90 percent of this year's new loans to SMEs," said BRI president Rudjito before the launching of a book on BRI Keluar Dari Krisis (BRI Exits from the Crisis) by State Minister of State Enterprises Sugiharto in Jakarta.

BRI says in the report that its total amount of outstanding loans increased from Rp 47.51 trillion as of the end of 2003 to Rp 58.1 trillion as of last September. Of the total, more than 85 percent were channeled to SMEs.

Most of the other financial indicators of the bank, such as non-performing loans (NPL) and loan-to-deposit ratio (LDR), are just as encouraging.

With savings and deposits generated from third parties slightly increasing from Rp 76.3 trillion as of the end of 2003 to Rp 78.57 trillion as of last September, the bank's LDR substantially increased from 62.3 percent to 73.95 percent, respectively.

BRI's director of credit, Gayatri Rawit Angreni said the bank's NPL decreased from 6.03 percent as of December 2003 to 5.75 percent as of September 2004. And its capital adequacy ratio (CAR) declined from 20.87 percent to 19.65 percent during the same period, but was still way above Bank Indonesia's minimum requirement of 8 percent.

Director General of Financial Institutions at the ministry of finance Darmin Nasution was impressed with BRI's performance, having learned that the bank's CAR dropped to "negative 118.4 percent" following the rupiah's sharp decline during the height of the economic crisis. (004)