NISP net profit surges 70%

Rendi A. Witular, The Jakarta Post, Jakarta

Publicly listed Bank NISP, a medium-sized bank, posted a higher net profit during the first nine months of this year, primarily on the lower cost of funds.

NISP announced on Thursday its net profit during the first nine month ending September jumped by 70 percent to Rp 201.5 billion (US$22.5 million), compared to Rp 118.7 billion in the same period last year.

The bank's income from interest declined to Rp 1.08 trillion from Rp 1.14 trillion, but its net interest income increased to Rp 470.2 billion from Rp 307.6 billion as the declining interest rate environment made the cost of funds cheaper.

"Net interest income increased due to the rise in net interest margins, which have benefited from lower funding costs," said NISP president director Pramukti Surjaudaja on Thursday.

Declines in Bank Indonesia's benchmark interest rate have pushed down interest rates for savings and deposits, thus reducing the cost of funds.

NISP's interest expenses declined to Rp 612.9 billion during the first nine months of this year from Rp 841.4 billion in the same period last year.

The bank's net interest margin improved to 4.70 percent from 3.56 percent in the same period last year.

NISP, which was originally named NV Nederlandsch Indische Spaar En Deposito Bank, said outstanding loans from January to September grew by 18 percent to Rp 9.45 trillion, from Rp 7.84 trillion in the corresponding period last year.

Some 30.1 percent of the loans were allocated to the manufacturing sector, 29.4 percent to the consumer sector, 18.5 percent to trading sector, 16.7 percent to the services sector and 5.3 percent to other sectors.

NISP also announced it had received partially guaranteed loans worth Rp 210 billion from the International Finance Corporation (IFC), the investment arm of the World Bank.

The funds will be allocated to support the bank's lending expansion to the consumer sector.

The Bandung-based bank, which had total assets valued at Rp 16.6 trillion as of September, is 15.05 percent owned by the IFC, 22.50 percent by Singapore-based OCBC Bank, 11.63 percent by PT Suryasono Sentosa, 11.63 percent by PT Udayawira Utama and 39.19 percent by the public.

NISP shares ended higher by Rp 25 at Rp 625 on the Jakarta Stock Exchange on Thursday.