Bank Internasional Indonesia, the country’s ninth-largest lender by assets, posted its highest first-half profit since 1997, boosted by rising income from loans.
BII, 97 percent owned by Malayan Banking Berhad (Maybank), said on Sunday that its net income after tax and excluding shares of minority shareholders had jumped 61 percent to Rp 592 billion ($63 million) in the six months ended June from the same period last year.
“The improved performance was mainly supported by solid growth across the bank’s core businesses, improved asset quality and continuing overall operational improvements,” BII said in a statement.
A key factor to the earnings was the bank’s net interest income, or income from loan interest less deposit interest, which rose 32 percent to Rp 2.6 trillion. This rise was supported by a 24 percent increase in outstanding loans to Rp 73.5 trillion.
The bank said global wholesale banking loans accounted for 38 percent of its total loans, while loans for small and medium enterprises contributed 25 percent and consumer loans contributed 36 percent.
On the funding side, total deposits from BII’s customers increased by 16 percent to Rp 76.6 trillion as of June 30, from Rp 65.9 trillion a year earlier.
Strong loans and deposit growth have lifted the bank’s total assets to a record Rp 102.0 trillion, up 21 percent from Rp 84.3 trillion in the previous year.
“I’m pleased to report that BII has passed the Rp 100 trillion milestone by recording total assets of Rp 102.0 trillion as of June 2012,” said BII president director Khairussaleh Ramli.
“The improved performance demonstrates that our long journey and efforts in regaining our growth momentum have now started to bear fruit.
“I am confident that our sustainable growth plan across all business segments will further improve our performance as we continue to capture higher market share while ensuring good assets quality.”
BII’s asset quality in the first six months improved as nonperforming loans fell to 2.11 percent of total loans, compared to 2.45 percent in the same period in 2011.
BII also said in the statement that strong loans and deposit rates were supported by the bank’s aggressive network expansion and investments in IT infrastructure and human capital.
During the first half, the lender added 24 new branches and 66 ATMs to its network. At the end of June it had 375 offices, including Shariah and overseas branches, and 1,218 ATMs, including 65 cash deposit machines.
BII joined other lenders that booked healthy profits on the back of solid domestic economic growth, which has in turn driven robust loan growth.
The central bank, Bank Indonesia, kept its benchmark overnight rate steady at 5.75 percent on July 12, helping to maintain the country’s economic growth.
Low borrowing costs have helped spur consumer spending and have allowed companies to continue expanding, further stimulating the domestic economy.
Lenders in Indonesia are benefiting from high margins on their loans.