Bank Negara Indonesia has attributed a 30 percent rise in first-half profit to its ability to expand lending despite rising inflation and a weak exchange rate that had the potential to crimp investment.
Net income at BNI, Indonesia’s fourth-largest lender by assets, rose to Rp 4.28 trillion ($415 million) in the January-to-June period compared to a year earlier, the company said in a statement on Thursday.
Gatot M. Suwondo, BNI president director, said the result came despite headwinds of accelerating price rises and a weakening currency due to a trade deficit and capital outflow.
BNI’s net interest income rose 23 percent to Rp 8.89 trillion in the first half, while fee-based income at the lender rose 22 percent to Rp 4.56 trillion.
“The increase in our operating income was the result our efforts to continue focusing on lending expansion in the eight sectors accounting for 70 percent of the total loan portfolio,” Gatot said a statement.
Gatot said the lender was focusing on agriculture, oil and gas, construction, power, food and beverages, chemicals, and communications.
Year-on-year inflation rose to 5.9 percent in June, according to Bank Indonesia data, compared to 4.5 percent a year earlier. The rupiah was this week trading at more than Rp 10,200 to the US dollar, depreciating about 6 percent so far this year.
Outstanding loans at BNI grew to Rp 222.7 trillion at the end of June, up 24 percent from a year earlier, compared to a 21 percent average rise across the country’s 120 commercial banks.
Defying the growth trend, BNI’s lending to medium-sized companies contracted by 16 percent to Rp 26.9 trillion in the first half.
Gatot attributed the fall to 116 clients, which between them had Rp 10.3 trillion in loans, being recategorized from medium-sized to corporate-sized. BNI corporate lending grew 52 percent to Rp 97 trillion in the first half.
The lender cut its bad loans to 2.6 percent of total loans by the end of June, from 3.4 percent a year earlier.
The bank’s third-party funds — gathered from savings accounts and time deposits — grew 8.7 percent to Rp 263.8 trillion in the six months to June.
Gatot said BNI had attracted 100,000 new customers since it nine months ago launched a credit card co-branded with England’s Chelsea Football Club.
BNI shares rose 1.2 percent to Rp 4,325 in Thursday trading in Jakarta.