Lippo records 47% income growth on lending expansion

Lippo records 47% income growth on lending expansion

The Jakarta Post, Jakarta

Publicly listed Bank Lippo, which was recently acquired by
Malaysia's Khazanah Nasional Berhad, reported on Tuesday almost a
50 percent surge in income in the first nine months of the year.

Lippo's unaudited net income increased by 47 percent to Rp
343.8 billion (about US$34.1 million) from Rp 233.6 billion in
the same period last year.

Net interest income, or revenue from borrowers after deducting
interest paid to depositors, rose 36.8 percent to Rp 879.4
billion from Rp 642.9 billion last year, predominantly on higher
lending.

The bank reported it had extended Rp 7.35 trillion in loans in
the first nine months of the year, from Rp 5.4 trillion in the
same period last year.

Some 48 percent of its loan went to small and medium
enterprises.

Lippo processes an average of Rp 530 trillion in payments each
month, according to Lippo president director Jos Luhukay during
the company's public expose.

He said Lippo would likely reach its Rp 8 trillion full-year
lending target on the back of low interest rates.

"We are not burdened by time deposit rates since we have a
healthy financing composition. That allows us to hood our lending
rates," Jos said.

The bank's funding structure consists of 40 percent savings,
35 percent demand deposits and 25 percent time deposits.

"We would like to maintain this composition to lower our cost
of fund," he said.

Lippo's capital adequacy ratio rose to 21.8 percent from 17.4
percent in the first nine months of 2005, with nonperforming
loans falling to 2 percent from 2.6 percent during the same
period in 2004.

Bank Lippo is majority owned by Santubong Investments B.V -- a
subsidiary of Khazanah Berhad -- which since Oct. 1 has held a
52.05 percent stake in the bank.

The Lippo Group, through PT Lippo E-Net, holds a 5.57 percent
of Bank Lippo, the government 2.48 percent and the public holds
the remaining 39.9 percent.