Lippo Bank back in black with profit of Rp 893b

Leony Aurora, The Jakarta Post/Jakarta

Publicly listed Bank Lippo reported a return to the black with Rp 892.7 billion (US$95.71 million) in 2004 audited profits, and accepted the resignation of its chief commissioner and founder Mochtar Riady.

Speaking after the bank's annual shareholders meeting on Friday, Lippo president Joseph Luhukay said that the company surged into profit last year compared to making a loss of Rp 515.9 billion in 2003.

"The main drivers for the profit were the rise in interest income with more lending and higher fee-based income," he said.

Net interest income rose 32 percent to Rp 935 billion in 2004, up from Rp 708 billion the previous year, while fee-based income increased by about Rp 48 billion to Rp 334 billion last year.

In its audited financial report taken from the bank's website, the biggest advance was in non-operating profits, which leapt to Rp 481 billion after recording a loss of Rp 367 billion in 2003.

Non-operating revenue increased from about Rp 7 billion in 2003 to Rp 485 billion last year, while non-operating expenses dropped from Rp 374 billion to Rp 4.7 billion. The reasons behind such large fluctuations were unclear.

Aside from the financial report, Lippo also appointed Christopher Williams from Swissasia Global -- a consortium led by Swissfirst Bank AG, which acquired the government's 52 percent stake in the bank last year -- as the new chief commissioner replacing the bank's founder Mochtar Riady.

Riady said that his stepping down from his post was part of his family's policy of leaving its businesses interests in the hands of professionals.

"I feel that I am obliged to do this so as to make sure that the company can continue doing business for a long time to come," said Riady.

At present, the family's stake in the bank stands at 5.56 percent through its publicly listed company PT Lippo E-Net, while the government owns 2.55 percent of the bank. Retail investors own 39.83 percent.

For this year, Lippo plans to increase its loan portfolio by between 30 percent and 35 percent to about Rp 7.6 trillion from the Rp 5.6 trillion it booked last year.

"About 50 percent, or even up to 60 percent, will be allocated for small and medium enterprises," Jos said.

With this increase, he expected the loan to deposit ratio to rise to over 30 percent this year from less than 23 percent last year.

As of the end of 2004, the bank's assets stood at Rp 27.8 trillion, making it one of the top 15 biggest lenders in the country.