Lippo Bank to boost new loans this year: CEO

Lippo Bank to boost new loans this year: CEO

P.C. Naommy, The Jakarta Post, Jakarta

Lippo Bank, the country's sixth largest bank, plans to boost new
lending by at least 80 percent this year, according to its
president Joseph Luhukay.

"As soon as we settle all (of our) tax debts and other
obligations, we will increase our loan-to-deposit ratio, which
currently stands at a low rate of 22 percent," said Joseph.

He said the bank would continue to focus its lending on
consumer loans and credit for small- and medium-sized
enterprises.

Last year, Lippo Bank's new lending volume declined to Rp 4.8
trillion (US$571.43 million) from Rp 5 trillion in 2002.

A consortium led by Swissfirst Bank AG has been named the
winning bidder for a 52 percent stake in Lippo Bank, but the
foreign investor has yet to complete the necessary documents to
allow the central bank to complete a crucial fit and proper test.

Lippo Bank, which concentrates its business strategy on
payment services, predicts that future trends will shift from
fixed-line transactions to mobile banking transactions with
cellular operators on the front line.

According to Joseph, currently Lippo Bank processes no less
than Rp 300 trillion in payment transactions in one month, with
Rp 15 trillion of the transactions done through e-banking, and
serving 400 companies.

In line with its business strategy, Lippo Bank signed a joint
business agreement with three cellular operators, PT Excelcomindo
Pratama, PT Telkomsel and PT Indosat for its new service called
Lippo Bank Instant Refill on Tuesday.

With the new service, 2.6 million of Lippo Bank's customers
will be able to add credit to their cell phones by sending a
message through their cell phones.

Joseph added that the bank would boost its e-banking services
rather than install more ATMs, which would cost millions of
rupiah.

According to Joseph, with e-banking, the bank could save 90
U.S. cents in operational costs for every transaction done in
branch offices or 9 cents for every transaction done through an
ATM. He added that banking through the Internet would only cost
the bank 1 cent for every transaction.

Research done by an international institution reveals that
every transaction at bank branches worldwide costs $1.07, and 27
U.S. cents via ATMs, and a mere 1 U.S. cent through mobile
banking.

Executive director of Indosat Hasnul suhaimi told The Jakarta
Post that the company had already set up similar deals with 14
banks. Lippo was the sixth bank to engage in SMS-banking
(transactions done through short messaging service).

According to Hasnul, the cooperation with the banks has
contributed 60 percent to the company's total revenue. With last
year's total income of Rp 8 trillion, the joint business has
contributed up to Rp 5 trillion.