PT Bank Internasional Indonesia Tbk (“BII” or the “Bank”) reported a net profit of Rp461 billion for the full year of 2010, a significant turnaround from the net loss of Rp41 billion in the previous corresponding period year ended 31 December 2009. The main drivers of this strong achievement were greater growth across the core businesses and continuous improvements in all business operations.
The Bank’s loan portfolio as of 31 December 2010 increased 35% from year end 2009, outpacing industry growth of 20%. The significant growth in total loans has brought the Bank’s total assets to Rp75.2 trillion, up by 23% compared to 31 December 2009.
The total loan portfolio of the Bank as of 31 December 2010 reached Rp53.6 trillion, an increase of Rp39.6 trillion in the previous corresponding period. The Bank is pleased to report that the highest contribution to growth came from a 45% increase in Consumer loans, followed by SME & Commercial and Corporate lending with growth of 31% and 29%, respectively. Growth in consumer loans was driven largely by auto loans which contributed 55.9% of the total consumer loan portfolio, with mortgage loans 28.9% and credit cards 8.8%.
Total deposits from customers increased 26.5% to Rp59.9 trillion as of 31 December 2010, up from Rp47.3 trillion recorded in 31 December 2009. The loan to deposit ratio increased to 89.03% as of 31 December 2010, up from the 82.93% in the previous corresponding year.
Ridha Wirakusumah, BII President Director and CEO, said “The steady track of growth we achieved in 2010 signifies our hard work in fixing basic fundamentals and setting the right foundation for the Bank which we started in the second semester of 2009. I am pleased to say that the Bank has revitalized its growth momentum, though there is still much to accomplish in our quest for greater growth and higher market share.”
The Bank’s net interest income (NII) improved by 19% YoY from Rp2,997 billion in December 2009 to Rp3,568 in December 2010. However despite tight competition in the banking industry and the unchanged reference interest rate from the Central Bank throughout the year, the Bank is pleased to have been able to keep its net interest margin to 5.89%, a slight reduction in 2010 from 6.10% in the previous year.
Other operating revenues (fee based income) as of 31 December 2010 were 7% higher at Rp2,066 billion compared to Rp1,937 billion in the same period last year, mainly generated by increases in fees from corporate deals, treasury transactions, credit card usage, trade finance, remittances, and other services .
The Bank has managed to maintain a marginal increase in its overhead cost at 13% from Rp3,257 billion in December 2009 to Rp3,687 billion in December 2010 in spite of its aggressive branch and ATM expansion throughout the year. In the last 12 months, the Bank has opened 72 new offices in 2010 consisting of branches, sub branches, and cash offices throughout Indonesia. The Bank’s cost to income as of 31 December 2010 improved to 65.44%.
Despite the global crisis in early 2010 affecting some of its corporate accounts, the Bank also managed to maintain its net non-performing loan (NPL) ratio at 1.74%, a slight increase from the 1.58% in December 2009. To ensure good asset quality, the Bank has tightened its risk management and credit controls while implementing quicker loan restructuring programs and closer monitoring of existing borrowers.
Total loss provision expense in December 2010 decreased by 29% compared to December 2009 from Rp1,742 billion to Rp1,239 billion while provision coverage has been well maintained at the 85.91% as of 31 December 2010.
The Capital Adequacy Ratio (CAR) with credit, market and operations risk was at 12.50%, well above Bank Indonesia’s minimum requirement of 8%.
“In accomplishing the quest for greater growth, the Bank has identified product initiatives from each business line. The Bank’s ability to tailor products to customer needs and the continuous effort in maintaining good relationships with customers has enabled the Bank to serve customers with better and more comprehensive financing solutions. As a result of this attention to customer needs and its efficient effective service, the Bank was recognized with a number of 1st place achievements in service quality awards in 2010,” added Ridha..
“A series of innovative and winning products, supported by continuing service excellence will enable the Bank to further attract new customers, expanding its customer base. As the pioneer in internet banking, the Bank is also in the midst of revamping and upgrading its internet banking to provide customers with easier and faster electronic banking services. The bank is also finalizing the development of mobile/SMS banking. The new internet banking platform and mobile banking are expected to be launched early this year. With product initiative supported by service excellence and expanding branch network, the Bank remains confident of its position as an innovative, relationship bank”, Ridha concluded.
Maybank Chairman and President Commissioner of BII Tan Sri Dato’ Megat Zaharuddin bin Megat Mohd Nor adds, “I am pleased that BII’s efforts to expand our coverage and deepen our customer focus has led to strong growth. The recognition given to our excellent customer services only serves to spur our staff on. Additionally, we have seen encouraging synergies with the Maybank Group, which can only increase with the Group’s recent announcement of its acquisition of Kim Eng, which has a strong presence in Indonesia”.
Implementation of Statement of Financial Accounting Standards no. 50 and 55
The Bank has now implemented the full adoption of the Statements of Financial Accounting Standards (SFAS) No 50 and 55 which commenced in the fourth quarter 2010. The full adoption of SFAS 50 and 55 requires the Bank to recognize the Effective Interest Rate amortization as well as collective and individual impairment.
Awards received in 2010
Throughout the year, the Bank has received series of awards:
Bank Internasional Indonesia (BII)
BII is one of the largest banks in Indonesia with an international network that comprises 327 branches including five Syariah branches, 937 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. As of 31 December 2010 total customer deposit base of Rp59.9 trillion and Rp75.2 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.