Panin Bank books increase of 51 percent in profit

JAKARTA (JP): Publicly-listed Panin Bank booked a net profit of Rp 45.81 billion (US$19.4 million) during the January-June period, a 51 percent increase over Rp 30.22 billion in the same period of last year.

Roosmiati Salihin, the bank's vice president, said last week that the profit growth raised the bank's retained earning to Rp 174.56 billion as of June from Rp 120.96 billion as of the same month in 1995.

"The bank's earning per share increased to Rp 152 in the first six months of this year from Rp 126 in the same period for 1995," she said, adding that the profit rise was partly attributed to the increase in fee-based revenue.

She acknowledged that competition in the banking industry is becoming so tight that Panin Bank should be able to diversify its services to maintain its earning performance.

"The best strategy is to improve the fee-base revenue so that the bank has another business alternative to support its earning growth," she said.

Panin Bank's fee-based revenue rose by 32.68 percent to Rp 49.30 billion in 1995 from Rp 37.15 billion in 1994. In the first semester of this year, the revenue from fee-based services reached Rp 38.90 billion.

The bank's total assets rose by 37.99 percent to Rp 4.89 trillion as of June from Rp 3.54 trillion as of the same month in 1994.

Roosmiati said that fee-based services are very important at present, given the tighter condition in the monetary sector.

She said the central bank's move early last year to require commercial banks to raise their minimum reserves to a minimum of 3 percent from 2 percent has significantly reduced the liquidity of the banking sector.

The central bank's decision last week to further raise the reserve requirement to 5 percent beginning next April would make the competition even tighter, Roosmiati said.

"That's why it is important for us to expand fee-based services to maintain the growth of earnings amid the growing competition in the market," she added.

Roosmiati said recently that the bank's pretax profit is expected to increase by 24 percent to around Rp 97 billion in 1996. (hen)