BRI's Profit Rises 14% to Rp 24.2t in 2014
[Updated at 10:48 p.m. on Monday, Jan 26, 2014]
Jakarta. State-controlled Bank Rakyat Indonesia posted a 14 percent increase in net income last year to Rp 24.2 trillion ($2 billion), thanks to strong loan growth.
BRI, the biggest microlender and second-largest lender by assets in Indonesia, reported outstanding loans increased by 14 percent to Rp 490.41 trillion in 2014, the majority of which was contributed by microloans, it said in a statement on Monday.
“New loans account in large part for the increase in net income. BRI’s loan portfolio remains consistent with its focus on small-to-medium enterprise development.
“Meanwhile, loans to corporations are channeled to businesses that have trickle down impacts to SMEs,” BRI’s micro business director Djarot Kusumayakti said in a separate press conference on Monday.
BRI’s microloan portfolio dominated 31.25 percent of its total outstanding loans.
The lender recorded a gross non-performing loan ratio of 1.69 percent.
Meanwhile, BRI’s fee-based income rose 24.9 percent to Rp 6.1 trillion, with e-banking transactions growing the fastest among fee-based revenue streams.
The lender’s acting president director Asmawi Syam said on Monday that the bank was committed to grow its e-banking business this year by investing more in technology infrastructure.
BRI’s corporate secretary Budi Satria said on Jan. 6 that the lender plans to boost capital expenditures by 66 percent this year as it seeks to improve its IT services and woo more customers in remote areas through branchless banking services.
It has set aside Rp 5 trillion for its capital expenditure in 2015, up from Rp 3 trillion last year.
BRI has set an ambitious technology access targets. The lender pledged by 2016 to become the first bank in the world to have its own telecommunication satellite, costing Rp 2.2 trillion to Rp 2.5 trillion.
BRI, which registered 7.3 million customers last year, posted a 23.45 percent rise in its third party funds — which include savings, term-deposits and demand deposits — to Rp 600.4 trillion.
It registered a loan-to-deposit ratio of 81.68 percent last year. The strong growth in loans as well as third party funds also boosted BRI’s total assets by 28.34 percent to Rp 778.02 trillion.
BRI added 594 new retail outlets last year in the form of regional offices, branch offices, cash office, and micro-to-mobile banking outlets.
As of the end of last December, BRI operated 10,396 total outlets nationwide, as well as 20,792 ATM and 45,268 point-of-purchase card swipers, known in Indonesian parlance as “electronic data capture units.”
As part of its future strategy, according to BRI’s finance director Ahmad Baiquni, the lender is “really enthusiastic to acquire a life insurance firm ... We hope the plan could be realized in the first half of 2015,” he said.
Lenders in Indonesia have been coping with a higher interest rate environment since 2013. The central bank raised the key interest rate several times in the last two years, from a record low 5.75 percent in 2013 to the current 7.75 percent.
Commercial banks have consequently jacked up their lending rates, increasing the burden on companies, including small and medium sized firms to service their debts.
GlobeAsia
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