Lippo Bank books 445% profit hike
Lippo Bank books 445% profit hike
JAKARTA (JP): Publicly listed Lippo Bank announced a record
445 percent jump in profits yesterday to Rp 530 billion (about
US$5.4 million) during the first half of the year compared to the
same period in 1997.
The pretax profits were 450 percent above projections, the
bank said.
The exceptional profit was mainly the result of current
economic developments in which the bank was able to take in high
interest earnings due to the central bank's high interest short-
term promissory notes (SBIs), the bank said in a media statement.
The earnings are reflective of a one-time gain from the high
interest rate environment and are not expected to be repeated, it
explained.
It said the bank's board of directors had decided to allocate
Rp 450 billion of the earnings to a special capital reserve fund
to support its corporate and business customers, particularly in
the distribution sector which has suffered financial hardships
from the economic crisis.
The new Rp 450 billion allocation will supplement the Rp 268
billion already allotted to the fund, it added.
The bank also announced that its total revenues during the
first semester ending on June 30 soared 270 percent to Rp 2.5
trillion from the same period in 1997.
"We entered the financial crisis with a strong balance sheet
and liquidity position. We are now benefiting from being able to
withstand the turmoil," Lippo Bank president Eddy Sindoro said.
The strong balance sheet reflects a relatively low loan-to-
deposit ratio (LDR) of 83.73 percent against the industry's
average of over 160 percent, Lippo said.
It added that the bank's liquidity ratio was currently at 31
percent -- meaning that for every Rp 100 in deposits, Lippo
maintained Rp 31 in cash-liquid assets.
"This compares favorably with the minimum liquidity reserve
requirement ratio of just 5 percent. Lippo is a major and
consistent net placer of excess funds in the interbank market
with a cash liquidity position of over Rp 3 trillion," it
said. (rei)