Panin Bank projects 25 percent increase in profits this year
Panin Bank projects 25 percent increase in profits this year
JAKARTA (JP): The publicly-listed Panin Bank projects a 25 percent increase in its pre-tax profits to Rp 96 billion (US$41.9 million) this year from Rp 77 billion in 1995.
The bank's president, Rostian Sjamsuddin, said the projected growth rate is lower than the 30 percent growth rate booked in 1995.
"The lower growth rate in the profits is due to the government's tighter monetary policy during 1996," Rostian said, adding that the decline is the general impact of the central bank's policy of limiting credit expansion to between 16 percent and 18 percent.
He said that like other banks, Panin Bank would limit its credit expansion to 17 percent this year, to follow Bank Indonesia's credit growth guideline.
Panin Bank, which operates 103 branches in major Indonesian cities, booked a 30 percent increase in its pre-tax profits last year to Rp 77 billion from Rp 59.53 billion in 1994. Its total assets grew by 23 percent to Rp 4.2 trillion as of last December from Rp 3.4 trillion at the end of 1994.
Rostian acknowledged that the bank is very careful when pursuing expansion activities to maintain a sound balance in its fund management.
"The bank's main priority is to increase capital before expanding," he said. "With a strong capital structure, we will be more prepared to anticipate future growth."
He said that the bank's capital adequacy ratio is 15.8 percent at present, far higher than the minimum standard of 8 percent required by Bank Indonesia.
Roosiana Solikin, a director of the bank, said that the strong capital base and its financial performance in 1995 is one reason why Merrill Lynch, a United Stated-based securities company, rated Panin Bank as the strongest bank listed on the Jakarta Stock Exchange.
Merrill Lynch, which recently opened its office here, gave Panin Bank an investment grade rating of triple B minus.
Merrill Lynch also assessed Bank Bali, Bank Bira, Bank Internasional Indonesia, Bank Danamon, Bank Niaga and Bank Dagang Nasional Indonesia.
The six banks received lower grades, between double B plus and double B minus. (hen)