Permata targets loan expansion

JAKARTA: PT Bank Permata is planning to increase its loan disbursed by between 15 percent and 20 percent next year, despite the country's sluggish economic growth caused by soaring inflation and interest rate hikes.

"Although high inflation and interest rates -- also tough business competition -- will be major obstacles next year, the company has set up a strategy to expand the loans," the seventh largest bank's president director, Stewart D. Hall, said on Monday.

The bank has targeted corporate loans to stand at between 20 percent and 30 percent this year. But until September, the credit expansion has reached 45 percent and is projected to reach 63 percent by the year-end.

"However, the bank's non-performing loans (NPL) this year have increased by 1 percent to 6.4 percent, caused by two major debtors, with debts standing at Rp 400 billion (US$40.82 million) and Rp 300 million," Hall said.

The bank's net interest income increased by 12 percent until September to Rp 1.27 trillion while its net profit dropped by 62 percent to Rp 184 billion. The decline in net profit was caused by Bank Indonesia's regulation to increase provision costs to Rp 131.5 billion, double for the same period last year. -- Antara