ASEAN KEY DESTINATIONS
BNI Syariah to invest Rp 5 trillion in capex
Bank BNI Syariah, a subsidiary of state-owned lender PT Bank Negara Indonesia (BNI), has prepared Rp 5 trillion (US$395.4 million) for capital expenditure (capex) to support its business expansion this year.
Bank BNI Syariah president director Dinno Indiano said part of the capex would be used for establishing 15 new outlets in the micro-financing segment. The firm expects lending in the segment to grow by 25 percent this year, higher than last year’s 20 percent.
Dinno said the bank would expand its micro-business network as it was expecting to increase the segment’s contribution from the current 8 percent of the total portfolio to 10 percent by the end of this year.
“We will invest around Rp 1 billion in each outlet, some of which will be established in the eastern part of Indonesia,” Dinno said.
Dinno said the lender would acquire the buildings for the outlets rather than rent office space in order to improve cost efficiency.
The rising price of property in the country had prompted many banks, including BNI Syariah, to purchase their own offices as the most efficient way to manage operating costs, he said.
Dinno said the bank, which currently has 85 micro outlets, decided to add new ones as a result of its internal policy of limiting maximum financing to Rp 15 billion per year for each outlet, as many of them had almost reached full capacity in the past two years.
According to Dinno, the policy aims to create strong internal control and business fundamentals as well as maintaining the quality of its human resources.
“From that point of view, we expect that our non-performing financing [NPF] will be maintained in a stable condition. Currently, we post 2.5 percent in micro-segment NPF, without a haircut,” he said.
Overall, Dinno said the bank aimed for 25 percent growth in total financing as well as third-party funding this year, down from last year’s level amid the economic slowdown,
He expected that the 25 percent financing and funding growth would be sufficient to generate a total income of Rp 160 billion by the end of the year, an increase from Rp 130 billion at the end of last year.
Dinno said the bank had booked around Rp 15 trillion in financing as of December last year, a 30 percent rise from the previous year. The bank had also posted Rp 19.5 trillion in total assets last year, up by 30 percent year-on-year, he said.
Dinno said that around 60 percent of the bank’s financing would remain in the consumer sector, including mortgages as well as a sharia-credit card, named the Hasanah Card.
The Hasanah Card — currently the country’s only credit card based on sharia principles — has been issued to around 220,000 cardholders, although it is struggling to survive due to Bank Indonesia’s strict regulation of credit cards.
In 2012, the central bank issued a regulation that prohibited people with monthly incomes of between Rp 3 million and Rp 10 million from having more than two credit cards from the same issuer, in an effort to reduce the rising number of non-performing loans.
“We estimate that there are 25,000 of our card [accounts] that should be closed due to the regulation. The reduction will not affect our margins significantly, but we are trying our best to make this card survive,” he concluded. - See more at: http://www.thejakartapost.com/news/2015/01/13/bni-syariah-invest-rp-5-trillion-capex.html#sthash.AI30Fg5b.dpuf
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