BNI profits up 23%

Higher income from interest and transaction fees pushed BNI's first quarter net profits up by 23 percent.

The lender reaped a profit of Rp 1.54 trillion or US$164.78 million in the January-March period amid “moderate” loan growth of 18.9 percent to Rp 138.65 trillion in outstanding loans, president director Gatot M. Suwondo said.

BNI booked a 20.9 percent increase in interest income to Rp 3.49 trillion during the first three months of this year compared with the same period last year.

Non-interest income, including fee-based income from transactions, grew 14.2 percent to Rp 1.69 trillion during the same period.

BNI’s ratio of non-performing loans declined to 3.6 percent as of the end of March this year from 4.1 percent in the same month of 2011.

As much as 35.4 percent of BNI’s total lending was disbursed to companies, 34.9 percent to small and medium enterprises, and 21.8 percent to consumer and retail segments with the remaining 7.9 percent allocated to support the company’s subsidiary and international businesses.

Although consumer and retail lending ranked third in terms of overall lending, it grew by a significant 32.7 percent from a year earlier.

Mortgage was the main contributor to growth with Rp 19.4 trillion in the first quarter of the year, up 49.8 percent from the same quarter in 2011.

BNI also reported a 10.4 percent year-on-year increase in credit card usage, which reached Rp 3.99 trillion in the first quarter.

Commercial and retail director Darmadi Sutanto said that the bank was optimistic that mortgage loans would keep growing despite the central bank’s plan to implement regulations requiring a minimum down payment of 30 percent this June.

“We will increase our channel with high-class developers to boost sales for high-class customers, who will keep buying despite the increase in the minimum down payment,” Darmadi said.

To meet the growing demand for credit, especially overseas, BNI is in the process of issuing five-year US dollar-denominated debt papers which offer a 4.12 percent yield.

Gatot said that the bonds were oversubscribed by six times. “Despite the oversubscription, we won’t increase it because the amount fits our needs.”

US dollar-denominated lending in may increase, given that BNI currently has 1,842 outlets and credit centers nationwide as well as five overseas branches, in Singapore, Hong Kong, New York and London. The company also has representative offices in several Middle Eastern and Southeast Asian countries.

“We want to strengthen the performance of our branches overseas, which previously borrowed from the central office for their foreign currency credits. In the future, we want overseas offices to become independent,” Gatot said.

Shares in BNI traded at Rp 3,625 apiece on Monday, down 0.68 percent from the previous day. The stock has fallen 3.07 percent so far this year.