ASEAN KEY DESTINATIONS
BRI posts 17% growth in loans, net profits in Q2
State-owned PT Bank Rakyat Indonesia (BRI), the country’s most profitable bank and third-largest lender by assets, posted around 17 percent growth in its net profits and lending in the second quarter (Q2) of this year, up from the same period a year ago thanks to quality loan disbursement and strong fee-based income.
The bank’s net profits reached Rp 11.72 trillion (US$1 billion) in the April-June period of 2014 from
Rp 10.01 trillion in the same period of 2013. Its outstanding loans amounted to Rp 459.13 trillion as per June, compared with Rp 391.77 trillion in June 2013, said BRI network and services director Suprajarto.
Banks across the country have been pressured by an increasingly limited cash supply as the central bank, Bank Indonesia (BI), raised its benchmark interest rate by 175 basis points last year. That has made liquidity tighter and banks have been paying higher deposit rates to entice third-party funds, which has squeezed their net interest margins (NIM) — the difference between interest rates charged to borrowers and those received from customers who store money at banks.
“The growth seen here was assisted by the bank’s ability to keep its non-performing loans at 0.57 percent,” Suprajarto explained to reporters at a BRI press conference on Tuesday.
BRI’s micro-business segment, which is its forte, grew rapidly by 18.1 percent to Rp 144.2 trillion in Q2 2014, from Rp 122.1 trillion last year. “Our micro-credit growth exceeded even the bank’s own credit growth,” Suprajarto added.
In relation to these figures, the amount of micro debtors amounted to 6.9 million people, signaling a strong period for the bank’s micro-business segment.
BRI’s profit growth was also assisted by its fee-based income, which grew by 20.8 percent year-on-year in 2014. The largest portion of the lender’s fee-based income came from e-banking transactions, which grew by 55.9 percent in 2014, making up 16.1 percent of the growth.
“The bank’s e-banking growth was triggered mainly by an impressive increase in transactions made through our ATM, SMS banking and Internet banking programs,” Suprajarto explained. BRI’s Internet banking usage rose by 247.2 percent to Rp 25.7 trillion in Q2 2014, from Rp 7.4 trillion in 2013.
Meanwhile, BRI’s savings accounts grew by 14.49 percent, which Suprajarto claimed was higher than the industry rate of 10.12 percent.
Overall third-party funds (DPK) grew 11.27 percent to Rp 448.45 trillion in the second quarter, with the bank’s current account and savings accounts (CASA) — which are cheaper funding sources than deposit accounts — contributing 57.3 percent.
However, BRI president director Sofyan Basir explained that the bank’s DPK growth for this year’s Q2 was lower than the growth of previous years, but that it could grow at a larger rate this year if BI’s tight monetary policy were to be loosened.
“If the tight-money policy was loosened, our third-party funds could achieve a growth of between 18 and 20 percent, as is usually the case,” Sofyan told reporters at the BRI press conference.
Regarding future plans, BRI corporate secretary Budi Satria said that the bank would focus on sustaining its fee-based income growth by focusing on retail funds, instead of relying on large deposits by large corporations.
“With retail funds, it is more of an individual level,” Budi told The Jakarta Post on Tuesday.
Budi also noted that the bank would add around 200 more mobile banking vehicles in 2014 in an attempt to win new customers. He said that some of the planned vehicles would be placed in traditional markets in order to diversify the bank’s customer base.
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