Bank Rakyat Indonesia first half profit up 57%

Increase in soaring net interest income, growing fee-based income and recovery in bad loans fuelled the profit rise.

Bank Rakyat Indonesia (BRI), the nation’s largest bank by lending, reported a 57 percent increase in net profit in the first half of this year, on the back of a surge in interest and fee-based incomes.

BRI director for institutional business relations, Asmawi Syam, said Friday that the lender’s profits soared 57.14 percent to Rp 6.77 trillion ($800.23 million) in the first six months of this year from Rp 4.32 trillion ($510.64 million) in the same period last year.

The growth in the bank’s net profits is the highest among the national banks. Two other major banks, Bank Mandiri and Bank Central Asia (BCA), also reported significant growth in net profits. Mandiri’s consolidated net profits grew 56 percent to Rp 6.3 trillion ($744.68 million) year-on-year, while BCA recorded a net profit of 20.4 percent to Rp 4.8 trillion ($567.04 billion) on the same period.

BRI finance director, Ahmad Baiquni, said the bank projected an estimated Rp 14 trillion ($1.65 billion) in net profits by the end of this year, a 15 to 17 percent growth rate compared to its full-year profits for 2010. “We have stable growth on profits,” he told a news conference.

Ahmad attributed the increase to surging net interest income, soaring fee-based income and recovery in bad loans.

Although loan growth fell below the bank’s 20 to 22 percent full-year target, at 18.34 percent, consolidated net interest income of the state-run lender soared to Rp 16.92 trillion ($2 billion) in the January-June period this year, up 23.3 percent from Rp 13.72 trillion ($1.62 billion). 

View the full story in The Jakarta Post.