Niaga reports 42% profit hike
Niaga reports 42% profit hike
The Jakarta Post, Jakarta
Publicly listed Bank Niaga, the nation's ninth largest bank in
term of assets, reported on Monday a 42 percent increase in its
first-half unaudited net profit as compared to the same period
last year, due mostly to a strong showing in its lending
business.
Niaga president Peter B. Stok said the publicly listed lender
posted a net profit of Rp 301.9 billion (about US$33.5 million)
in the period ending June 30, as against Rp 212 billion in the
corresponding period the year before.
The profit increase was attributed in particular to rapid loan
expansion, which had in turn boosted its net interest income --
interest earned from borrowers after deducting the interest paid
to depositors, he added.
"Some 71.6 percent of the total net interest revenue had come
from interest from credits," Peter said, adding that this
represented an increase over the same period last year in which
income from lending accounted for 64.9 percent of total net
interest revenue.
Net interest income rose by 60 percent from Rp 442.1 billion
as of June last year to Rp 707.6 billion in the first semester of
this year.
Another source of interest revenue was government
recapitalization bonds, although their share declined to 21.7
percent from 28.1 percent the year before.
Most banks here have benefited from the significant decline in
the central bank's benchmark interest rate (SBI), which allows
banks to increase their lending to consumers at more affordable
rates. The lower SBI rate has also pushed down interest rates on
time deposits and savings.
As with other banks, Niaga is reaping hefty profits from the
gap between its lending rates and the interest it pays on
deposits. At present, Niaga's annual borrowing rates are in
double digits as compared to around the 6 percent to 7 percent it
pays to depositors.
Niaga has a network of 16 branches and about 3,500 employees,
and is controlled by Malaysia's Commerce Asset-Holding Bhd.,
which holds a 52.8 percent stake in the bank. The government,
through the Asset Management Company (PPA), owns 21.5 percent,
while the public holds about 25.65 percent of the bank's shares.
Aside from interest gains, the bank's profit surge was also
driven by gains in non-interest income, which rose by 5.3 percent
to Rp 267.9 billion from Rp 254.6 billion previously.
Meanwhile, it was also revealed that the bank's plan to issue
new shares as part of a rights issue would be postponed from the
end of August as originally planned as the bank was still working
out the details.
Niaga's financial indicators
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2004* 2003*
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Net profit (Rp) 301.9b 212b
Loans (Rp) 16.5t 11.8t
LDR (%) 78.7% 64.1%
CAR (%) 11.6% 12.5%
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* As of June
Source: Niaga