NISP sees 40 percent increase in profit this year
NISP sees 40 percent increase in profit this year
The Jakarta Post, Jakarta
Mid-sized bank NISP said that its net profit may grow by up to
40 percent this year on higher revenue from lending and lower
fund costs amid a continuing decline in the Bank Indonesia (BI)
benchmark interest rate.
NISP president Pramukti Surjaudaja told The Jakarta Post on
Friday that despite the general election, the bank was expecting
profit to jump by between 35 percent to 40 percent this year.
"We are optimistic that we can post a strong growth this year
despite a tougher environment," said Pramukti.
He explained that thus far the imminent general election had
not disrupted the bank's operations, although some business
players had decided to reduce their activities over fears of
election violence.
The bank, which is the country's 13th largest bank in terms of
assets, recorded an unaudited profit of Rp 170.7 billion (US$21
million) last year, up from Rp 93 billion in 2002.
Pramukti said that in order to boost profit, the bank planned
to increase lending by at least 30 percent this year, or around
Rp 2.85 trillion, to Rp 12.35 trillion.
The publicly listed bank, which submerged from the late 1990s
banking crisis relatively unscathed, focuses its business on
providing loans to small and medium-sized enterprises, which
account for around 70 percent of its loan exposure.
Aside from lending, a reduction in the costs of funds was also
expected to boost profit this year, as the lower Bank Indonesia
benchmark interest rate allows banks to reduce their interest
rates on time deposits and savings accounts.
The interest rate on one-month SBI promissory notes is
currently 7.42 percent, down from around 8 percent early this
year.
BI expects to further cut its benchmark interest rate this
year, as inflation remains in check while the rupiah continues to
stabilize against the U.S. dollar.
Pramukti said the bank's revenue from operations was expected
to jump by up to 50 percent.
Last year, the bank posted a revenue of around Rp 1.3
trillion.
The World Bank's investment arm, International Finance Corp.
(IFC), has a 15 percent stake in the bank.
The bank opened 34 new branches in Java, Sumatra, Sulawesi,
Bali and Kalimantan last year in a bid to boost its retail
operations. Currently, the bank has a total of 134 branches.