Panin Bank writes off loans worth Rp 38.5b
Panin Bank writes off loans worth Rp 38.5b
JAKARTA (JP): Publicly-listed Panin Bank removed bad loans worth around Rp 38.5 billion (US$16.5 million) from its balance sheet last year to improve its financial performance, says a senior official of the bank.
Roosniati Salihin, the bank's vice president, said that the value of the bad loans, written off in 1995, declined from Rp 49.09 billion in 1994.
"The removal of the bad loans from the bank's balance sheet was made to comply with Bank Indonesia's write-off regulation," she told newsmen following annual shareholders' meetings of Panin Group's four finance companies: Panin Bank, Panin Life, Panin Insurance and Panin Overseas Finance.
According to the central bank's regulation, loans with installments that have not been paid for 36 months should be removed from the balance sheet.
Roosniati said that non-performing loans in 1995 reached 1 percent of Panin Bank's total lending of Rp 2.4 trillion, with bad (totally unpaid) credits amounting to 0.5 percent of the total lending.
She said the bank booked a 31 percent growth in its pre-tax profit to Rp 78.46 billion in 1995, from Rp 59.53 billion a year earlier, in spite of the write-offs.
"The pre-tax profit was expected to increase by 24 percent to Rp 97 billion this year," she said. She expressed optimism that the earning target could be achieved, given the promising performance during the first five months of the year.
The bank's pre-tax profit in the January-May period already reached Rp 53 billion, she said.
The bank's loans, which increased by 16 percent to Rp 2.4 trillion in 1995, are projected to increase by 17 percent this year.
In yesterday's annual meeting, the bank's shareholders agreed on the payment of Rp 12 billion, 24 percent of the total profit, as dividend or Rp 40 (1.73 cent) per share.
The bank's subsidiary, Panin Finance, agreed to pay a cash dividend of Rp 41 per share, while Panin Insurance and Panin Life will pay dividends of Rp 10 and Rp 50, respectively.
Panin Life booked a 10 percent increase in its profit, to Rp 20.2 billion; and Panin Finance recorded a 41 percent growth, to Rp 7.8 billion. Panin Insurance's profit rose by 62 percent, to Rp 13.1 billion.
The companies' shareholders of the respective approved the proposal to set aside certain amounts of funds from their net profits to help fight poverty in the country.
Panin Bank agreed to contribute Rp 1 billion; Panin Life, Rp 100 million; Panin Finance, Rp 50 million; and Panin Insurance around Rp 70 million to the poverty alleviation program.
President Soeharto early this year appealed to individuals and institutions with annual incomes of at least Rp 100 million to set aside around 2 percent of their earnings for poverty alleviation, which is now coordinated by the office of the minister for population affairs.(hen)