PT Bank Internasional Indonesia Tbk (“BII” or the “Bank”) today announced net profit of Rp415 billion for the first nine months ended 30 September 2010, a significant turnaround from the net loss of Rp183 billion in the previous corresponding period ended 30 September 2009. Despite the significant adjustments recognized by the Bank due to the implementation of the Statements of Financial Accounting Standards (SFAS) No 50 and 55, the Bank was still able to record significant improvement in its performance. The strong performance was achieved on the back of improving growth across the business segments and supported by continuous improvements in all business operations.
The Bank’s loan portfolio as of 30 September 2010 grew 39% and continued to outpace industry growth. The significant growth in total loans has brought the Bank’s total assets up to Rp72.2 trillion, an increase of 27.1% compared to 30 September 2009. The total loan portfolio reached Rp50.8 trillion in September 2010 compared to Rp36.5 trillion the previous year. Consumer contributed 43% growth, followed by 38% from SME & Commercial and 36% from Corporate. Growth in consumer loans was largely driven by auto loans which contributed 63.8%, followed by mortgage loans 31.6%, home equity loans (Maxima) 23%, and credit card 18%.
BII President Director and CEO Ridha Wirakusumah said today, “Our efforts in fixing the basic fundamentals in the greater part of last year have restored our competitiveness and confidence in entering the tight competition to capture higher market share. Our continuing investments in the Bank’s infrastructure and also in the human capital as the most important asset of the Bank have supported the growth momentum which we have just started”
Total deposits from customers increased 26% to Rp55.4 trillion as of 30 September 2010, up from Rp43.8 trilion recorded in 30 September 2009. The loan to deposit ratio increased to 91.26% as of 30 September 2010, up from the 82.37% in the previous corresponding year.
“Whilst continuing to improve on our fundamentals, we have now entered the phase of developing winning products. Our products targeted for selected market segments such as Woman One & Superkidz, savings account dedicated for women and children have contributed to growth of funding”, said Ridha. “Furthermore, our ongoing product development with International Finance Corporation (IFC) on a Woman Enterpreneur programme will indeed be a next winner,” added Ridha.
Net Interest income for the first nine months ended 30 September 2010 reached Rp2.55 trillion from Rp 2.19 trillion, higher by 16% compared to 30 September 2009. Tight competition in the banking industry and the reduction of the lending interest rate resulted in a lower net interest margin of 5.80% in September 2010 from 6.06% in the previous corresponding period.
Other operating revenues (fee based income) as at 30 September 2010 reached Rp1.52 trillion, largely contributed by an increase in fees from credit cards, trade finance, remittances, and other service fees.
BII maintained on the aggressive expansion of its branch (adding 47 branches) and ATM network during the first nine months in 2010. Nevertheless, the Bank was able to manage its overhead expenses to a small increase of 6% to Rp 2.59 trillion as of 30 September 2010 from Rp2.45 trillion in the previous corresponding period. The cost to income ratio improved 63.9% in September 2010 from 66.7% in September 2009.
Operating profit after provision significantly increased to Rp612 billion as at September 2010 compared to (Rp 197 billion) in the previous year.
The Bank has successfully managed asset quality and despite significant loan growth, the Bank’s net loan loss provision declined by 40% to Rp854 billion in September 2010 from Rp1,421 billion in September 2009. The decline was mainly due to improvement in the Bank’s asset quality as reflected by the ability of the Bank to maintain its net non performing loan (NPL) to below 2%.
Capital Adequacy Ratio (CAR) with credit, market and operations risk charged was at 13.16%, well above Bank Indonesia’s minimum requirement of 8%.
”Going forward we will continue our aggressive growth strategy to achieve our aspiration to become the best bank in the markets we serve. Our synergy with Maybank will create new business initiatives to accelerate our growth momentum. This provides reach and access for the Bank in reaching out to more customers and increasing our market share in the industry. We plan to further expand our branch network by opening more than 200 new offices in three years”, added Ridha.
Maybank Chairman and President Commissioner of BII Tan Sri Dato’ Megat Zaharuddin bin Megat Mohd Nor said, “The significant turnaround by BII to re-engineer and transform their operations is indeed commendable. It is satisfying to see that the intensive efforts by management to strengthen operations and build on capabilities have paid off and we now have a franchise that is indeed on a growth trajectory in terms of profitability and business expansion. In doing this, we always keep in mind our communities around our operations, providing them with products and services which are of value and fair prices. The strong Indonesian economy and consumer demand provide a landscape of abundant opportunities for us to tap into optimizing on synergies and regional reach through the Maybank Group.”
Implementation of PSAK 50/55
BII will fully implement the Statements of Financial Accounting Standards (SFAS) No 50 and 55 (“PSAK 50 & 55”) at the end of this year. During the last nine months BII has been gathering and preparing data, upgrading the data source as well as chart of accounts, enhancing front end system, and developing the SFAS application to fully comply with PSAK 50 & 55 requirements. We have already performed the simulation for Effective Interest Rate amortization, collective impairment as well as individual impairment. Significant adjustments related to PSAK 50/55 as a result of the simulation have been incorporated by the Bank since the first semester 2010.
Note : 1 USD = Rp8,925
BII is one of the largest banks in Indonesia with an international network that comprises 303 branches including 5 Syariah branches, 893 ATMs and 15 CDMs (Cash Deposit Machines) BII across Indonesia, and also connected with more than 20,000 ATMs under ATM PRIMA, ATM BERSAMA, ALTO, CIRRUS, and Malaysia’s MEPS network, and to more than 2,800 Maybank ATMs in Malaysia and Singapore as well as a banking presence in Mauritius, Mumbai and the Cayman Islands. With a total customer deposit base of Rp55 trillion and Rp 72 trillion in assets, BII provides full range of financial services through its branch and ATM network, phone banking and internet banking channels. BII is listed on the Indonesia Stock Exchange (BNII) and is active in SME/Commercial, Consumer and Corporate banking. BII provides products and services to medium and commercial size enterprises and individuals with credit cards, mortgages, deposit, lending, and wealth management services. Corporate clients are provided with services in lending, trade finance, cash management, custody, and foreign exchange.